Many on FOMC Said More Progress Needed Before Slowing QE Pace
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Many Federal Reserve officials said more progress in the labor market is needed before deciding to slow the pace of asset purchases, according to minutes of their last meeting.
“Most observed that the outlook for the labor market had shown progress” since the-bond buying program began in September, according to the record of the April 30-May 1 gathering released today in Washington. “But many of these participants indicated that continued progress, more confidence in the outlook, or diminished downside risks would be required before slowing the pace of purchases would become appropriate.”
Policy makers said May 1 they may accelerate or slow monthly purchases of $40 billion in mortgage securities and $45 billion of Treasuries in response to changes in the labor market and inflation. They also pledged to hold the target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.
A number of officials said they were willing to taper bond buying as early as the next meeting on June 17-18 if economic reports show “evidence of sufficiently strong and sustained growth,” according to the minutes.
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