Federal Open Market Committee members said that if they decide to start tapering asset purchases at their next meeting, the process could begin in mid-November or mid-December. In minutes from the group’s September 21-22 meeting released today, members remarked that it would be appropriate to have a gradual tapering process that ended around the middle of next year, provided the economic recovery remains broadly on track.
On inflation, members increased their inflation projections as supply constraints have been larger and longer lasting than previously anticipated. Members noted that uncertainty with the economic outlook remains high, with the uncertain course of the virus, supply chain disruptions and labor shortages complicating the interpretation of economic data.
Participants noted that they expect the labor market to continue to improve in coming months. However, some members remarked that a complete return to pre-pandemic conditions was unlikely, as the pandemic had prompted reductions in the workforce that were likely to persist, including a large number of retirements and other departures from the labor force. FOMC members said that their contacts had broadly reported having difficulty in hiring workers.