Fed Chairman Ball (pictured) said after last month’s policymaking meeting that the economic recovery remains uneven
According to the minutes of the U.S. Federal Reserve Board (Fed) meeting in April, several Fed officials hinted at discussing tapering the bond purchase program in the next few meetings. Bloomberg information interpreted that this represents the earliest possible discussion will begin next month.
Fed 20 meeting minutes released summary said: “Some participants hinted that if the economy continues to move rapidly toward the inflation target set by the Federal Open Market Operations Committee (FOMC), it may be appropriate to begin discussing plans to adjust the pace of asset purchases at some point in the next few decision-making meetings.” After the disclosure of this news, U.S. stocks fell once on the 19th to intensify the trend, the U.S. bond yield mostly maintained a higher level.
The market continues to look closely for clues as to when the Fed may begin to scale back its bond purchases, which are currently at least $120 billion a month. the Fed’s current balance sheet is approaching $7.9 trillion, almost double the amount before the outbreak.
Fed officials have always insisted that they will not change monetary policy before economic conditions such as employment and inflation reach the targets they set. According to the minutes of the April meeting, this is the first time Fed officials have hinted at the possibility of tapering future bond purchases, although the schedule has not yet been determined.
However, the U.S. job growth was strong in March, which was the latest data available when the Fed held its April decision meeting. After that, officials mentioned that continued strong data is needed to prove that the economy is moving toward a level sufficient to reduce bond purchases.
The April jobs report that came out after the Fed’s last meeting was disappointing, with non-farm payrolls adding only 266,000, far worse than analysts’ estimates of 1 million, clouding the recovery outlook, and officials will consider the impact of the April and May jobs data at their next meeting in June.
Fed Chairman Ball also said after last month’s decision meeting, the economic recovery remains “uneven and far from complete”, that the economy has not yet reached the FOMC set “further substantial progress” standard, not enough to make the Fed adjust policy .
On inflation, Federal Reserve officials said the surge in demand coupled with the emergence of supply bottlenecks may push inflation above 2% in the short term. Meeting minutes show that many participants said “some supply shortages may not be resolved quickly, if so, these factors will constitute upward pressure on prices after this year.
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