Minutes from the June 15-16 US Federal Reserve Policy meet released on Wednesday, did not deliver any clue on when or how the US Central Bank would begin to taper fiscal supports for the economy, as Fed policymakers had reportedly sensed that an uneven recovery over recent months had fallen short of engendering the impetus that might have prompted the Central Bank officials to harness a hawkish tone, however, the Fed had agreed to act, if a prolonged rise in inflation indicators or unescapable fiscal risks could materialize.
Alongside this, June FOMC Minutes came against the backdrop of hawkish remarks from US Fed’s Bullard alongside the US Treasury Secretary Janet Yellen. Nonetheless, adding that the economy had yet to reach out a position to put a kibosh on the pace of asset repurchase program, the FOMC Minutes stated, “Participants generally judged that, as a matter of prudent planning, it was important to be well positioned to reduce the pace of asset purchases, if appropriate, in response to unexpected economic developments, including faster-than anticipated progress toward the Committee’s goals or the emergence of risks that could impede the attainment of the Committee’s goals”.
In point of fact, minutes from the US Central Bank’s June 15-16 policy meet seemingly had underscored a divided Fed which had apparently been wrestling over the possibilities of a long period of higher inflation alongside financial instability amid a sustained drag in US labour market, however, a majority of participants in the meet had been quoted saying that the terms of reducing the US Fed’s monthly $120 billion bond repurchase program, could be met somewhat earlier than many had anticipated.
US Fed pledges to act if inflation or other risks materializes
Apart from that, another group of Fed policymaker had undermined a robust reopening of the US economy citing that the pandemic had left behind a deeper wound in the economy and more cautious approach would be required before heading into any major policy change, added the June FOMC Minutes.