WASHINGTON: At the meeting where they announced the rollback of their pandemic stimulus measures, some Federal Reserve officials wanted swifter action and worried about price increases, according to minutes released Wednesday.
The Fed earlier this month announced it would begin the process of tapering its monthly purchases of bonds and securities meant to help the economy weather the Covid-19 downturn, at a pace that would put the central bank on track to end them entirely by the middle of next year.
The announcement came as inflation climbs well above the Fed’s two-percent target, upping pressure on top officials including Chair Jerome Powell who have said the price increases will be temporary and hiking rates too early could prevent jobless people from being rehired.
“A number of participants discussed the risk that, in light of recent elevated levels of inflation, the public’s longer-term expectations of inflation might increase to a level above that consistent with the committee’s longer-run inflation objective,” according to minutes from the November 2-3 meeting of the Federal Open Market Committee (FOMC).
The Fed had been buying at least $80 billion in Treasury bonds and at least $40 billion in mortgage-backed securities each month. At the FOMC meeting’s conclusion, officials voted to cut those down by $10 billion for the former each month and $5 billion for the latter beginning in November.
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