Federal Reserve officials at their April meeting said a strong pickup in economic activity would warrant discussions about tightening monetary policy, according to minutes from the session released Wednesday.
“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary stated.
Chairman Jerome Powell said after the meeting that the recovery remains “uneven and far from complete” and the economy was still not showing the “substantial further progress” standard the committee has set before it will change policy.
However, since then the Consumer Price Index showed inflation rising at a 4.2% year over year pace, the GDP is expected to show growth approaching 10% in the second quarter, and indicators in manufacturing and spending are showing strong upward momentum.
The one exception was a stunningly slow pace of hiring in April, with nonfarm payrolls rising just 266,000 against expectations for a 1 million gain.
At the April session, the policymaking Federal Open Market Committee voted to hold benchmark short-term borrowing rates near zero and to continue buying at least $120 billion in bonds each months.
Along with that decision, the Fed upgraded its view on the economy, saying growth has “strengthened” and inflation was rising.
Since then, Fed officials have been united in saying the economy remains at the mercy of the Covid-19 pandemic and they are committed to keeping policy loose.
The April meeting was held before inflation numbers for the month were released.
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