Fed: Slowing inflation only temporary

The Marriner S. Eccles Federal Reserve building stands in Washington D.C. U.S. on Friday Nov. 18 2016. Federal Reserve Chair Janet Yellen told lawmakers on Thursday that she intends to

"The re-escalation in the trade tension between USA and China since the meeting, that could change Fed's outlook a lot", said Eric Stein, co-director of the global income group at Eaton Vance Management in Boston.

The Fed released the minutes from the May 1-2 FOMC meeting on May 20.

The US Federal Reserve is not eager to take any action to cut or raise interest rates.

The May FOMC minutes detailed a reserved conversation among policymakers who believed that patience on rates would be appropriate for the foreseeable future.

Earlier Kaplan also said US bond markets are "flirting" with a yield curve inversion that could signal slower economic growth ahead.

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In accordance with the FOMC's neutral view, the minutes noted that "members observed that a patient approach to determining future adjustments to the target range for the federal funds rate would likely remain appropriate for some time".

'Other sources of uncertainty remained.

Some of the risks to the outlook that anxious markets in December seem to have receded, and Williams said he expects to see United States growth this year "a bit above two percent" while inflation should hit the Fed's goal in the next year or two.

The central bank has been criticized - most aggressively by President Donald Trump - for raising the benchmark lending rate four times last year even though inflation never materialized as unemployment fell to the lowest point in almost 50 years.

New York Fed President John Williams said at a press briefing that there is not now a strong argument for changing rates, including as a response to low inflation readings that may due to temporary factors.

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Lu said, "China is open to the door of dialogue, but sincerity is indispensable to make a consultation meaningful". President Donald Trump is providing another $16 billion in aid to USA farmers hurt by his trade policies.

Big banks required to meet strict liquidity requirements have been holding more reserves than regional banks that do not, Fed research here? earlier this year has found.

Still, the minutes from the most recent meeting showed a more buoyant tone.

The Federal Reserve officials voted in April to leave interest rates in the range of 2.25-2.5%.

The minutes also revealed a split among the officials about the outlook for inflation, which has stubbornly remained below the Fed's two percent target despite a strong economy and low unemployment rate.

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