Federal Reserve officials see downside risks to growth, upside risks to unemployment: FOMC minutes

• Almost all Federal Reserve officials at the Federal Open Market Committee's May 2-3 meeting said downside risks to growth and upside risks to unemployment had increased due to banking stresses, according to the FOMC minutes released Wednesday.
• With the increased risks, participants "generally expressed uncertainty about how much more policy tightening may be appropriate." Some, though, said additional "policy firming would likely be warranted at future meetings," if progress in bringing down inflation to the Fed's 2% target remained "unacceptably slow."
• The policymaking committee increased its key rate by 25 basis points, representing its 10th straight rate hike, to 5.00%-5.25%. Within the past 15 months, the central bank ratcheted up the federal funds rate target range from near 0% in an effort to push inflation down.
• The FOMC's statement had removed the language signaling further rate hikes, leading many Fed watchers to believe the central bank was ready to pause its rate-hiking path. Traders assign a 65.8% probability that the policy rate will stay at 5.00%-5.25% at the Fed's June 13-14 meeting, according to the CME FedWatch tool. But the 34.2% probability of a 25-bp increase isn't insignificant.
• Developing... check back for updates.

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