Federal Reserve officials could begin reducing the extraordinary help they’ve been providing to the economy by as soon as mid-November, according to minutes from the central bank’s September meeting released Wednesday.
At the policymaking session, the committee voted unanimously to hold the central bank’s benchmark short-term borrowing rate at zero to 0.25%. That went along with the decision to hold the monthly asset purchases at a minimum $120 billion.
However, the post-meeting statement also indicated that the Fed soon might be ready to start curtailing the bond purchases, in a process known as “tapering.” Markets were looking at Wednesday’s release for clues on how members feel about the issue and when the reductions might begin.
The committee also released the summary of its economic expectations, including projections for GDP growth, inflation and unemployment. Members scaled back their GDP projections for this year but upped their outlook for inflation and indicated they expect unemployment to be lower than earlier estimates.
In the “dot plot” of individual members’ expectations for interest rates, the committee indicated it could begin raising interest rates as soon as 2022. Markets currently are pricing the first rate hike next September, according to the CME FedWatch tool.
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