The Federal Reserve has added a bit more detail about how it plans to end some of the extraordinary measures put in place during and after the financial crisis.
In minutes released from the mid-June policy-setting session, the nation's central bank cautions that while asset purchases are "not on a preset course," it envisions a final reduction of $15 billion, following the October meeting. This is what some refer to as the tapering process after the third round of quantitative easing, or "QE."
Elsewhere in the 25-page document:
- Members of the Federal Open Market Committee felt the economy was rebounding "following a surprisingly large decline in real (gross domestic product) in the first quarter of the year." That was the revised 2.9 percent drop in growth that almost no one saw coming, as reported by the Commerce Department.
- While noting they downgraded growth expectations for all of 2014, FOMC members' projections for the second half of the year "changed little." The Fed officials' downgraded outlook for growth calls for GDP this year of between 2.1 and 2.3 percent.
- Looking around the globe, "a couple" of FOMC members noted positive actions by their counterparts in Japan and Europe had improved the outlooks for those areas. "Several others" remained concerned about "persistent low inflation" in Europe and Japan. Another "couple of participants expressed uncertainty about the outlook for economic growth in Japan and China." Finally, "several" saw Iraq and Ukraine "posing possible downside risks to global economic activity or potential upside risks to world oil prices."
What is not in the document is any clear signal when the Fed will lift short-term interest rates from their record low levels. Some 12 of the 16 FOMC members indicate the first boost is expected in 2015.
The Fed's next policy meeting is scheduled for July 29 and 30.
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