Fed stimulus debate minutes released early

 

New York

The minutes of the last meeting of the US Federal Reserve arrived five hours earlier than expected today, with the record showing a growing debate about whether the central bank should begin rolling back its stimulus measures as early as mid-year.

The minutes of the March meeting were meant to be released in the middle of the afternoon, but Wall Street traders were surprised to see the document flash up on their screens in the morning. Bank officials decided to bring forward the release after the minutes were accidentally emailed to congressional staffers and trade organisations on Tuesday afternoon, many hours before they were the meant to be transmitted on Wednesday.

In a worrying disclosure this afternoon, it emerged that copies of the minutes had also been sent out to officials at a number of big Wall Street banks. According to a list of email addresses obtained by the Wall Street Journal, the minutes were accidentally transmitted early to employees at JP Morgan Chase, Goldman Sachs, Nomura and Citigroup.

Discovery of the mistake prompted the central bank to bring forward the release owing to the sensitive, market-moving nature of the information.

According to the minutes, all but one of the policymakers on the bank's Open Market Committee, which sets interest rates and decides the scope of the bank's policy actions, "saw the economic outlook as little changed since the previous meeting" and judged that "a highly accommodative stance of monetary policy was warranted in order to foster a stronger economic recovery".

At heart of the debate is the $85bn (£55bn) that the Federal Reserve is currently spending every month to buy mortgage-related and government bonds. The minutes showed that "a few members" thought that recent improvement in economic conditions "would make a reduction in the pace of purchases appropriate around midyear". Several others, however, thought that policy should be tightened later in the year, with the purchases potentially concluding by the end of the year.

Not everyone was in agreement, with two members indicating that the bond buying, which has been seen as a critical factor in the recent improvement in the all-important US housing market, "might well continue at the current pace at least through the end of the year".

While the debate shows that the Fed, led by Governor Ben Bernanke, was at its last meeting moving in the direction of tighter policy, the central bank is likely to exercise caution at its meeting this month, given the recent jobless figures. The last non-farm payrolls report showed that a mere 88,000 jobs had been created in March – less than half of what economists had expected. The slim gains came exclusively from the private sector, and were seen as evidence of growing concern among employers about the impact of the tens of billions of dollars worth of spending cuts currently hitting the US economy. If the so-called "sequestration" package of cuts continues to weigh on the economic outlook, the bank is unlikely to roll back its stimulus measures.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

The Green Recruitment Company: Graduate Energy Analyst

£20000 Per Annum: The Green Recruitment Company: Summary: The Green Recruitm...

Day In a Page

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'
Singapore's domestic workers routinely exploited and often abused in the service of rich nationals

Singapore's hidden secret of domestic worker abuse

David Cameron was shown the country's shiniest veneer on his tour. What he didn't see was the army of foreign women who are routinely exploited and often abused in the service of rich nationals
Showdown by Shirley Jackson: A previously unpublished short story from the queen of American Gothic

Showdown, by Shirley Jackson

A previously unpublished short story from the queen of American Gothic
10 best DSLRs

Be sharp! 10 best DSLRs

Up your photography game with a versatile, powerful machine
Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash