FED MINUTES SHED LIGHT ON ECONOMIC OUTLOOK
Federal Reserve officials worried that a lack of further fiscal stimulus would jeopardize an economy recovery that was moving faster than expected, according to minutes released Wednesday from the central bank’s September meeting.
The Federal Open Market Committee on Wednesday released minutes from its Sept. 15-16 meeting. The Fed’s policymaking arm held interest rates steady at the meeting and approved language outlining its new approach to inflation.
The minutes described the recovery in GDP at that point as being “rapid.”
The meeting featured extensive discussion about the economic outlook, as members said the economy was doing better than expected in good part because of the fiscal help provided by Washington.
That support is in jeopardy as talks have broken down between the White House and congressional Democrats and may not resume before the November election.
“Many participants noted that their economic outlook assumed additional fiscal support and that if future fiscal support was significantly smaller or arrived significantly later than they expected, the pace of the recovery could be slower than anticipated,” the meeting summary stated.
Small businesses and farmers were being bolstered by the support, officials said, amid an economy that had regained more jobs than expected through August.
As such, “the absence of further fiscal support would exacerbate economic hardships in minority and lower-income communities,” the minutes said.