Fed to remain patient in asset purchases, minutes show

By Ovunc Kutlu

ANKARA (AA) - The US Federal Reserve will remain patient to decide when to start ending its $120 billion per month asset purchase program that supports the coronavirus-hit American economy, according to minutes released Wednesday.

While various participants of the Federal Open Market Committee (FOMC) mentioned they expect conditions for beginning to reduce the pace of asset purchases to be met earlier than anticipated, some said data provide less clear signal about economic momentum and added that FOMC would have more information in coming months to make a better assessment.

"As a result, several of these participants emphasized that the Committee should be patient in assessing progress toward its goals and in announcing changes to its plans for asset purchases," said minutes from the Fed's June 15-16 meeting.

The Fed signaled last month it could make two rate hikes in 2023, by 0.25% each, but did not hint when it would start rolling back its asset purchases.

Some analysts believe the Fed Chair Jerome Powell would signal it during his address to the Jackson Hole meeting in late August, or the central bank would announce it at the end of its Sept. 21-22 meeting.

If the pandemic is taken under control in the US and American economy returns to full employment, the Fed could lower its asset purchases by $15 billion in each of its eight meetings through 2022, according to analysts.