The decision-makers at the U.S. Federal Reserve are confident that their policy of unusually low interest rates for an extended period is still not threatening to spark inflation, but they nevertheless discussed how to move rates back toward more normal levels, according to the minutes of their last meeting released Wednesday.
The Fed governors discussed possible means of exiting their long-running easy money policy, but also noted that their discussions did not mean they were implementing a new policy yet.
The Fed is always cautious in its statements as the market watches its every word, and any perceived action will sharply move markets.
"Participants generally agreed that starting to consider the options for normalization at this meeting was prudent, as it would help the (policy-setting) committee to make decisions about approaches to policy normalization and to communicate its plans to the public well before the first steps in normalizing policy become appropriate," read the minutes from the April 29-30 Federal Open Market Committee.
The minutes included the important caveat, "The committee's discussion of this topic was undertaken as part of prudent planning and did not imply that normalization would necessarily begin sometime soon."
As usual the discussion focused on the Fed’s twin mandate of stable employment and modest inflation, both key to steady growth.
With unemployment still above ideal levels and with inflation still below the Fed’s 2 percent target, the central bank’s consensus opinion reflected in the minutes suggests policy may remain unchanged for some time.
According to the minutes, the Fed doesn’t believe that it faces “a trade-off between its employment and inflation objectives.”