MNI BRIEF: Fed Edged Closer to Taper Talk in April Minutes

Several Federal Reserve officials believed it might be appropriate to begin talking about tapering in coming months if economic improvements are sustained, minutes from the central bank's April meeting said Wednesday.

"A number of participants suggested that if the economy continued to make rapid progress toward the Committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," the minutes showed.

"Some participants mentioned upside risks around the inflation outlook that could arise if temporary factors influencing inflation turned out to be more persistent than expected."

MNI has reported the Fed has made some headway toward its "substantial further progress" marker for tapering QE, but not yet enough to formally begin signaling an exit. St. Louis Fed President James Bullard told MNI in an interview this week he's so far pleased with the rise in inflation expectations from levels that were too low. But he and others are closely watching how expectations behave over the longer run for signs of un-anchoring.

"­Though the sectors most adversely affected by the pandemic remained weak, they had shown improvement. Inflation had risen, largely reflecting transitory factors," the report added, largely recapping what the Fed said in its statement and Fed Chair Powell said during his press conference.