- Minutes from the Federal Open Market Committee’s September 15-16 meeting show Federal Reserve officials raising concerns that a lack of new fiscal support could hinder the US economic recovery.
- FOMC participants “assumed the enactment of some additional policy support this year,” according to the minutes. Without such support, “the pace of the economic recovery would likely be slower,” they added.
- The meeting came roughly three weeks before President Trump abruptly halted negotiations on a new bill, saying in a Tuesday tweet he would freeze stimulus talks until after the presidential election.
- Some FOMC members fired back at the president’s action. Letting the economy move forward without congressional support is like “letting the forest fire just rage,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Wednesday.
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Federal Reserve officials raised concerns about a lack of additional fiscal stimulus during their September meeting, roughly three weeks before President Donald Trump axed negotiations for new aid.
Minutes of the Federal Open Market Committee’s September 15-16 meeting revealed policymakers “assumed the enactment of some additional fiscal policy support this year.” Without such support from Congress, “the pace of the economic recovery would likely be slower,” according to the minutes.
The absence of new stimulus would also “exacerbate economic hardships in minority and lower-income communities,” FOMC participants added. The two groups are among those hit hardest by the virus and its economic fallout.
“For the time being, the Fed is sending the message that they have, in fact, done a lot already,” Bob Miller, BlackRock’s head of fundamental fixed income in the Americas, said. “What is clearer, however, is the committee members’ revealed preference that fiscal policy is the optimal response