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8 Jan 2014
FOMC: Officials saw waning QE benefits and risks on high accommodative stance
FXstreet.com (San Francisco) - The Fed thinks the QE impact is declining over time as "A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue, although some noted the difficulty inherent in making such an assessment," according to the minutes of the Federal Reserve policy December 17 meeting.
According to the minutes, most officials supported the tapering of $10Bn approved in the last meeting and further reductions in measured steps as they see improvements in the labor market. Some wanted large cuts to purchases, quicker end to program.
In this line, the FOMC discussed changing unemployment and inflation thresholds but no decision was taken. Officials are 'most concerned' about the risk to stability as "a highly accommodative stance of monetary policy could provide an incentive for excessive risk-taking in the financial sector."
According to the minutes, most officials supported the tapering of $10Bn approved in the last meeting and further reductions in measured steps as they see improvements in the labor market. Some wanted large cuts to purchases, quicker end to program.
In this line, the FOMC discussed changing unemployment and inflation thresholds but no decision was taken. Officials are 'most concerned' about the risk to stability as "a highly accommodative stance of monetary policy could provide an incentive for excessive risk-taking in the financial sector."