Watch for Debate on `Accommodative' Policy as Fed Minutes Drop
(Bloomberg) -- John Williams sees the Federal Reserve’s era of pledging easy monetary policy coming to an end. Minutes of the U.S. central bank’s May 1-2 policy meeting could reveal if his colleagues agree.
Michael Feroli, the chief U.S. economist at JPMorgan Chase & Co., would “not be surprised” to see some warning in the May minutes if a wording change is coming in June, he wrote in a note previewing the 2 p.m. Wednesday release.
Williams -- the president of the San Francisco Fed who takes the helm of the New York Fed on June 18 -- told Bloomberg in an interview last week that it might make sense to stop pledging “accommodative” policy and a prolonged period of low rates, echoing a debate that surfaced in minutes of policy maker’s meeting in March.
|Here are the statement sentences that may be up for review:|
Any update would be partly a mark-to-market, reflecting that rates have moved from near zero toward more normal levels. But it’s not clear what level represents neutral -- a setting where policy neither fosters nor slows growth -- adding tension to the discussion of how and when to amend the language.
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