Fed Saw Bond-Buying Program Providing ‘Very Significant’ Support

Minutes from December meeting show officials worrying about economic risks from surging virus cases, but hopeful about vaccines

During a Senate Banking Committee hearing in mid-December, Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell disagreed on Mnuchin’s decision to allow emergency Federal Reserve lending programs to expire. Photos: Press Pool (2) (Originally published Dec. 12, 2020)

香蕉视频苹果下载Federal Reserve officials last month broadly supported new plans to guide the steady growth of their $7.4 trillion asset portfolio, but they didn’t see a strong case to boost the economic stimulus the asset purchases provide.

香蕉视频苹果下载Since June, the central bank has been buying $120 billion in Treasury and mortgage securities a month—initially to stabilize markets and later to support the economy by holding down long-term interest rates. Minutes of the Fed’s Dec. 15-16 policy meeting indicated officials saw a high bar for dialing up that support by increasing the amount or changing the composition of those purchases.

“Participants generally judged that the asset purchase program as structured was providing very significant policy accommodation,” according to the minutes, which were released Wednesday.

The minutes also indicated that many officials were nervous about the potential for growth to stall in the winter amid a surge in Covid-19 cases and hospitalizations. But they also thought newly approved vaccines had reduced the chance of worse-than-anticipated economic outcomes later in 2021.

“A number of participants saw risks to economic activity as more balanced than earlier,” the minutes said.

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