Minutes of the FOMC
held on Dec. 17-18, when they surprised the markets by announcing
the "taper", revealed a broad agreement for the decision.
Most members agreed that the cumulative improvement in labor
market conditions and the likelihood that the improvement would
be sustained indicated that the Committee could appropriately
begin to slow the pace of its asset purchases
Only one member, (Boston Fed President Rosengren) said that the
decision was premature.
However some members also expressed concern about the potential
for a spike in interest rates "
if a reduction in the pace of asset purchases was
misinterpreted as signaling that the Committee was likely to
withdraw policy accommodation more quickly than had been
So they decided that the Committee should indicate that "f
urther reductions would be undertaken in measured steps and
that the pace of asset purchases was not on a preset cours
Members agreed that labor market conditions had improved in
recent months and while fiscal policy was still restraining
growth, the extent to restraint had come down.
Investors were hoping that these minutes would provide some clues
about the tapering timeline. But the minutes did not provide any
new clues. They just reiterated that further action would be
contingent on the "
outlook for the labor market and inflation
" as well as their assessment of the "
efficacy and costs of purchases
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