The Fed Promotes a Quickening that Takes Many Years

by Mike ‘Mish’ Shedlock
The Street

In the minutes of the June 9-10 FOMC meeting, the Fed discussed racism, Covid, Forward Guidance, Asset Purchases, and Yield Curve Caps.

Please consider the Minutes of the Federal Open Market Committee for June 9-10, lead image from Powell Wants to Talk Policy, but all Fed block quotes are from the FOMC Minutes.

Discussion of Forward Guidance, Asset Purchases, and Yield Curve Caps

Participants discussed tools for conducting monetary policy when the federal funds rate is at its effective lower bound (ELB). The discussion addressed two topics: (1) the roles of forward guidance and large-scale asset purchase programs in supporting the attainment of the Committee’s maximum-employment and price-stability goals and (2) in light of the foreign and historical experience with approaches that cap or target interest rates along the yield curve, whether such approaches could be used to support forward guidance and complement asset purchase programs.

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