Fed Members Say "Tapering Within This Year Is Appropriate"

July FOMC Meeting Minutes Released
Majority of Members Say "Tapering Start Within This Year Is Appropriate"
Emphasize Tapering and Rate Hike Have Different Criteria
Market Impact Is Limited

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] It has been confirmed that members of the U.S. Federal Reserve (Fed) agreed to start tapering asset purchases within this year. Although the policy to implement tapering within the year was confirmed, the New York stock market and the government bond market have not shown significant changes.

On the 18th (local time), the minutes of the July Federal Open Market Committee (FOMC) meeting released by the Fed stated, "Most members judged that it would be appropriate to reduce the pace of asset purchases within this year, as the economy is expected to make substantial further progress toward the criteria if it broadly develops as anticipated."

The minutes mentioned that most members acknowledged that the inflation rate target had been achieved. Some members indicated that the employment goal might not meet substantial further progress, but this was a minority opinion.

However, the minutes emphasized that members noted that even if tapering begins, it is not a precursor to an interest rate hike, and that rate increases depend on the economic outlook.

Regarding the tapering method, the majority of members preferred to reduce purchases of Treasury securities and mortgage-backed securities (MBS) simultaneously. Some members said further discussion on the tapering method was necessary.

After the release of the FOMC minutes, major indices in the New York stock market widened their losses. The Dow Jones Industrial Average fell by 0.25%, and the S&P 500 index dropped by 0.21%, but the Nasdaq narrowed its gains and remained nearly flat.

The yield on the U.S. 10-year Treasury note fell before the FOMC minutes were released but then approached 1.3%, settling at 1.267%, the same level as the previous day.

This content was produced with the assistance of AI translation services.