The minutes from the final FOMC meeting were released nowadays, and here are some of the highlights of the comments:

• FOMC judged risk of prices not easing was ‘predominant’ distress, FOMC saw some risk of ‘deterioration’ in price expectations
• FOMC agreed sustained price ‘moderation’ not yet convincing
• Fed says housing activity likely to contract for several quarters, new domestic inventories “quite elevated”
• Fed says participants judged labor market remained “rather tight”, particularly for skilled workers
• Fed says inflation pressures may be sustained by resource use, energy and commodity prices, dollar drop
• FOMC saw housing as ‘key source of uncertainty’
• FED says participants saw sustained moderation in core inflation not yet “convincingly demonstrated”
• FOMC anticipated
  core inflation to be ‘relatively subdued’
• Fed says housing sector biggest downside growth risk, likely to remain drag on growth for some time
• Fed says rising mortgage delinquencies, subprime problems could crimp credit availability, housing demand
• Fed minutes say that downside risks to growth “more balanced” than at instance of May FOMC meeting

Basically, they are repeating the same mantra, that inflation pressures are poised to ease though they have not yet done so in any meaningfully way. additionally, that the downturn in the housing market remains the key risk to subpar economic growth. But as expanded as jobs are plentiful, consumer spending should be regular.

Original post by J. Kahn