Reuters
Fed minutes may provide clues on bond-taper timeline, inflation outlook
At its June policy meeting the Federal Reserve edged towards a debate over when and how to reduce its support for a U.S. economy healing from the coronavirus pandemic, and the release of the minutes later on Wednesday may provide insight on how fast that discussion is evolving amid an unexpectedly large jump in inflation. The Federal Open Market Committee’s June 15-16 meeting saw the U.S. central bank shift towards a post-pandemic view of the world, dropping a longstanding reference to the coronavirus as a constraint on the economy and, in the words of Fed Chair Jerome Powell, “talking about talking about” when to shift monetary policy as well. The start of that discussion, along with interest-rate projections showing higher borrowing costs as soon as 2023, has caused investors to anticipate that the Fed will move faster than expected to end its support for an economy still afflicted by high levels of unemployment and, now, rising inflation.
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