Minutes from the Fed’s June Meeting

The Federal Reserve just released the minutes from its June meeting. By the way, the Fed’s Board has seven members but there are currently two vacancies. That means that even inside the Fed, unemployment is running at 28%.

Here’s a part of the minutes:

Most participants expected that much of the rise in headline inflation this year would prove transitory and that inflation over the medium term would be subdued as long as commodity prices did not continue to rise rapidly and longer-term inflation expectations remained stable. Nevertheless, a number of participants judged the risks to the outlook for inflation as tilted to the upside. Moreover, a few participants saw a continuation of the current stance of monetary policy as posing some upside risk to inflation expectations and actual inflation over time. However, other participants observed that measures of longer-term inflation compensation derived from financial instruments had remained stable of late, and that survey-based measures of longer-term inflation expectations also had not changed appreciably, on net, in recent months. These participants noted that labor costs were rising only slowly, and that persistent slack in labor and product markets would likely limit upward pressures on prices in coming quarters. Participants agreed that it would be important to pay close attention to the evolution of both inflation and inflation expectations. A few participants noted that the adoption by the Committee of an explicit numerical inflation objective could help keep longer-term inflation expectations well anchored. Another participant, however, expressed concern that the adoption of such an objective could, in effect, alter the relative importance of the two components of the Committee’s dual mandate.

At the same time, the Fed released its revised economic forecast which you can see here.

In response to today’s Fed minutes, gold for August delivery closed at $1,562.30 after getting as high as $1,574.30.

Posted by on July 12th, 2011 at 3:53 pm


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