WASHINGTON- Federal Reserve officials felt their employment benchmark for decreasing support for the economy “could be reached this year,” but appeared to disagree on other key aspects of where monetary policy should turn next in the transition from the pandemic crisis, according to minutes from last month’s policy meeting.
The account of the July 27-28 meeting showed Fed officials largely expect that later this year they will reduce the central bank’s emergency monthly purchases of $120 billion of Treasury bonds and mortgage-backed securities.
But consensus on other key issues appeared elusive, including the start date and pace of the bond-buying “taper,” and whether the bigger risk to the recovery is posed by inflation, ongoing joblessness, or the lurking chance that a resurgent coronavirus may throw things into reverse.
As policymakers weighed recent spikes in prices against the value of being “patient” with monetary policy so more hiring could take place, they also noted “the risks that rising COVID-19 cases associated with the spread of the Delta variant could cause delays in returning to work and school, and so damp the economic recovery.” – Reuters
