Federal Reserve officials seem to split evenly into two sides on the inflation outlook, according to their March meeting minutes released on Wednesday.
“Some” Fed officials say congestion and strong demand will push price inflation “more than expected,” the report said.
At the same time, “several” other Fed officials expressed confidence that factors that have contributed to low inflation over the past decade “could once again cause more inflationary pressure than expected.”
The Fed has upgraded its growth and employment forecasts and forecasts inflation will rise to 2.4% this year – well above the 2% target – but then fall to 2.1% by 2023.
Despite these changes, the average Fed forecast will not raise interest rates until 2023.
The Fed cut its policy rate to zero in March last year.
The Fed has said it will maintain this easy stance until the economy returns to full employment and inflation has risen to 2% and on a moderate rise above 2% for some time.
At the same time, the Fed is buying $ 80 billion in Treasury and $ 40 billion in mortgage securities to support the economy. The Fed has said it will continue these buying activities until there is “more significant progress” in achieving its low unemployment and stable inflation targets.
The market focuses on the time when the Fed can make a descending notice of asset purchases.
The minutes say it will “be a while longer” until more significant progress is made.
Stocks are little changed after minutes of Dow Jones Industrial Index
down 9 points in afternoon trading.