The minutes of the Federal Reserve Board (Fed) April interest rate meeting on Wednesday (19) hinted that it may be appropriate to begin discussions on controlling the bond-buying program at the upcoming meeting, although Fed officials remain dovish as the economy is still some distance away from achieving its goals.
The U.S. Federal Reserve Board (Fed) announced its latest interest rate decision last month on the 28th, the Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate at 0%-0.25% and to purchase bonds at a steady rate of $120 billion per month.
Wednesday, the Federal Reserve Board (Fed) April interest rate meeting minutes released, the market is concerned about the Fed’s view of future inflation, in order to judge the Fed’s path to reduce bond purchases.
The latest minutes read, “Many officials at the meeting believe that if the economy continues to move rapidly toward its target, it may be appropriate to begin discussing plans to adjust the pace of asset purchases sometime in the upcoming meeting.”
Fed members still prefer an accommodative stance, however, because there is still a long way to go before the economy makes sustained progress toward the Fed’s maximum employment and inflation targets.
The minutes also mentioned that an expected surge in demand as the economy opens up further, combined with some temporary supply chain bottlenecks, will result in personal consumption expenditures prices temporarily above 2%. After the temporary effects of these factors subside, participants generally expect inflation to ease.
Fed officials hinted to reconsider its easing policy, the dollar, gold went up, the U.S. ten-year bond yield rose to a high of 1.68%, U.S. stocks should expand losses, the Dow Jones slumped once fell more than 370 points, that the finger once fell nearly 1%.
Fed will hold its next interest rate meeting from June 15 to June 16, when officials will not only issue a new policy statement, but also update its forecast of economic growth, inflation, unemployment and the appropriate path for the target rate.
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