Fed Anxiety Exposed Clearly In The Minutes Of The FOMC Meeting

 The US Federal Reserve (Fed) continues to see uncertainty plaguing economic prospects, where the direction of recovery is highly dependent on how coronavirus is curbed.

The minutes of the meeting, published earlier this morning, also showed the Fed policymakers were divided on how to implement new strategies for monetary policy at their September meeting.

Policy makers unanimously agreed in August on a broader new approach to monetary policy and most Fed members supported it by providing more forward guidance on central bank interest rates to formulate a new framework.

The central bank implemented the approach last September with a promise to keep interest rates close to zero until inflation is estimated at 2% and full employment is achieved.

Following that, policymakers also discussed various related issues as well as provided greater clarity on the Fed plan, where some Fed members agreed to drive inflation above 2% while some thought the plan only helped a little economic recovery.

The minutes of the meeting also highlighted the Fed's concern over weak world inflation as well as the possibility that the Trump administration and Congress in providing fiscal support as desired by the central bank and threatening the US economic recovery process.

However, the Fed is of the view that the recovery in economic activity is recovering faster than expected from the fall in the second quarter.