FOMC Members: Economic Outlook Remains Extraordinarily Uncertain

As the coronavirus pandemic continues in the U.S., there remain “an extraordinary amount of uncertainty and considerable risks to the economic outlook,” according to members of the Federal Reserve’s Federal Open Market Committee. Minutes from the group’s June 9-10 meeting showed that several members are anticipating additional waves of outbreaks that could “result in further economic disruptions and possibly a protracted period of reduced economic activity.”

Members noted that the Fed’s monetary policy stance will likely need to remain highly accommodative for some time to facilitate a recovery in the labor market and bring inflation closer to the Fed’s 2% target. FOMC participants also supported issuing more explicit forward guidance regarding the path of the federal funds rate.

While they noted that the Fed’s actions in the early days of the pandemic helped reduce risks to the economic outlook, members raised concerns that actions taken thus far to provide fiscal support to households, businesses and governments “might prove insufficient.” Additional risk to the economy could come from stresses in foreign markets due to the pandemic, they added.