21 Aug 2013
FOMC Minutes: Almost all members agreed taper not appropriate un July
FXstreet.com (Córdoba) - Almost all of the Federal Reserve officials agreed that a change in the $85 billion-per-month purchase program was not yet appropriate, according to the Minutes of the July 30-31 meeting released on Wednesday.
The Fed did not signal as to whether such a taper would come later this year. While a "few" argued that "it might soon be time to slow somewhat the pace of asset purchases” as indicated by the contingent plan articulated at the previous meeting, another "few" emphasized the importance of being patient and evaluating additional information.
“While a range of views were expressed regarding the cumulative improvement in the labor market since last fall, almost all Committee members agreed that a change in the purchase program was not yet appropriate” , the minutes said.
Meanwhile, the minutes showed several Fed officials were willing to consider lowering the 6.5% unemployment threshold if easier policy is needed, while a few were worried that changing forward guidance could undermine policy effectiveness.
As shown by the Fed statement, the Committee reaffirmed its intention to keep the target federal funds rate at 0 to 1/4 percent and retained its forward guidance that it anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.
The Fed did not signal as to whether such a taper would come later this year. While a "few" argued that "it might soon be time to slow somewhat the pace of asset purchases” as indicated by the contingent plan articulated at the previous meeting, another "few" emphasized the importance of being patient and evaluating additional information.
“While a range of views were expressed regarding the cumulative improvement in the labor market since last fall, almost all Committee members agreed that a change in the purchase program was not yet appropriate” , the minutes said.
Meanwhile, the minutes showed several Fed officials were willing to consider lowering the 6.5% unemployment threshold if easier policy is needed, while a few were worried that changing forward guidance could undermine policy effectiveness.
As shown by the Fed statement, the Committee reaffirmed its intention to keep the target federal funds rate at 0 to 1/4 percent and retained its forward guidance that it anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.