Fed Officials Are Divided Over When to Reduce Its Debt Holdings
The minutes of the June meeting said several officials wanted to start “within a couple of months,” while others favored waiting, suggesting
that officials are debating whether to begin in September or wait until December.
By BINYAMIN APPELBAUMJULY 5, 2017
WASHINGTON — The Federal Reserve raised interest rates on schedule during the first half of 2017,
but its plans for the second half of the year are less clear, according to minutes of the Fed’s most recent meeting in June.
The pace of price increases has slowed in recent months, forcing the Fed to back away from its predictions
that this would be the year that inflation approaches the Fed’s desired 2 percent annual pace.
The minutes acknowledged what were described as “surprisingly low recent readings” on inflation,
but said most officials continued to expect a return to normal
Officials debated how soon to start reducing the Fed’s securities portfolio, as the sluggishness of inflation
and the exuberance of investors continued to concern them.
“We’re trying to generate paths for employment and inflation that meet our mandated objectives.”
The low level of inflation, on the other hand, is causing some officials to question whether the Fed is moving too quickly.