Faith officials talked about reducing asset purchases

Some Federal Reserve officials argued that the US central bank should pave the way for a reduction in some of its shares. extensive financial support if the economic recovery accelerates further.

According to a meeting of the Federal Open Market Commission in late April, officials said the U.S. economy as a whole was still “far from” its twin goals of achieving “full employment and price stability,” and still demanded very nice money. Several argued that quite some time could come this year for the Fed to change its stance.

“Some participants suggested that if the economy continues to make rapid progress towards the committee’s goals, it may be advisable to start discussing a plan to adjust the pace of asset purchases at some point in the coming meetings,” the minutes say.

The Fed, led by President Jay Powell, currently buys $ 120 billion a month in mortgage-backed securities and agencies, and has vowed to continue at that pace until it sees “significant progress” in inflation and employment.

The minutes underscored the central bank’s commitment to carefully managing any transition politically – a more cautious approach than former Fed Chairman Ben Bernanke suggested in 2013. Discussions about the removal of political support led to the so-called taper tantrum. tight financial conditions around the world.

“Many participants noted that the committee should clearly report its assessment of progress towards its long-term goals before the time could be sufficient to change the pace of asset purchases,” the minutes said. “The timing of these communications would depend on the evolution of the economy and the pace of progress for the commission’s purposes.”

The sale of U.S. government bonds resumed on Wednesday, sending higher profits. The 10-year Treasury benchmark yield was 1.69 percentage points 0.05 points higher.

Shorter-dated bonds have also been added to the sale, with a two-year release yield rising 0.02 percentage points to 0.35 percent. The five-year release fell about 0.05 percentage points to 0.86 percent.

“They don’t publish these things without knowing that this has an effect,” said Kathy Jones, Charles Schwab’s chief fixed income strategist. “It’s a first suggestion, but it will be a gradual process. All language is conditioned. They are giving themselves a lot of flexibility. ”

The FOMC meeting in late April before a relatively weak labor report and data showing a jump in consumer prices due to labor imbalances rising inflation, complicating forecasts for the U.S. to make a path to pandemic recovery.

Most U.S. monetary policy makers maintained a relatively bloody view of inflation. “As demand rises, consumer price inflation” would rise above “slightly” by 2 percent, but “when the transient effects of these factors fade, participants generally expected measured inflation to ease,” according to the minutes.

“Looking ahead, participants expected inflation to be at levels consistent with achieving the commission’s goals over time.”