Meeting minutes from the July 27 – 28 meeting
The FOMC kept rates unchanged and the taper on track at the July 27-28 meeting. At the top of the hour, the meeting minutes will be released. The market will focus on any talk of timing of the taper, and amount of taper through the timeline, and the inflation expectations (are the transitory or not). Also, where does the Fed members stand on "substantially further progress" and any tightening of rates thoughts.
Looking back at the press conference, Chair Powell said:
- The labor market has a ways to go
- Household spending rising at an especially rapid pace
- Special factors appear to be weighing on labor force participation but those should wane in coming months
- Supply bottlenecks have been larger than anticipated
- Inflation still expected to fall back to longer run goals
- Housing remains strong and business investment rising at a solid pace
- Inflation could turn out to be higher and more persistent than we expect
- If we saw signs of material and consistent rises in medium-term inflation beyond target, we would respond
- The timing of any taper will depend on incoming data and we will provide advance notice before any changes
- We're clearly on the path to a very strong labor market
- It's unusual to have such a high rate of vacancies to workers
- There may be a speed limit with people finding new jobs, it takes time; it's about job selection
- Suspects impacts of delta wave will be less but we will have to wait and see
- Delta could slow the economy down for a period of months or not
- There's a range of views on what timing will be appropriate
- Today was the first deep dive on the timing
- I'm not meaning to suggest anything on the timing of taper; there's a range of views
- I'm not in any position to provide any guidance on the timing of the taper
- We're talking about tapering right now, we'll take it meeting by meeting
- There is little support for tapering MBS before Treasuries
- Inflation has been driven by a supply side shock
