The minutes of the March 16 meeting of the Federal Open Market Committee were released Tuesday afternoon. The Fed remains committed to keeping rates low, citing the likelihood of only moderate economic growth over the next two years.
In preparation for the meeting, the Fed staff said that both economic growth and core inflation wouldn’t rise as much as they thought. The minutes also refer to an uptick in consumer spending but noted that income “appeared less supportive of spending.”
This begs the question of whether we’re in a sustainable recovery. The stock market clearly thinks so and recent increases in bond yields indicate that even bond investors may be warming to the idea. Another take on this isn’t whether the recovery is sustainable, but is the current pace of recovery sustainable? High unemployment and anemic growth in household income would suggest it is not, and the Fed seems wary about that was well.