Almost all Federal Open Market Committee members agreed that it was not yet appropriate to make a change in the Fed's asset purchase plans, according to the minutes of the FOMC's July meeting, released Wednesday.
"A few members" stressed the importance of being patient and evaluating additional economic information before changing the pace of asset purchases. But a few other members suggested "it might soon be time to slow somewhat the pace of purchases," as outlined in a contingency plan that had been articulated in June.
The FOMC member who voted against the policy statement released at the end of the July meeting, Federal Reserve Bank of Kansas City President Esther George, thought "the improvement in the labor market was an important reason for calling for a more explicit statement from the Committee that asset purchases would be reduced in the near future," the minutes noted.
"A range of views were expressed regarding the cumulative improvement in the labor market since last fall," the minutes said. While the unemployment rate had declined and recent gains in payroll employment have been solid, other measures of labor utilization, like the labor force participation rate and the number of discouraged workers, suggested more moderate improvement. Additional indicators of labor demand remained low.
When discussing the wording of the policy statement, "the Committee decided to underline its concern about recent shortfalls of inflation from its longer-run goal by including in the statement an indication that it recognizes that inflation persistently below its 2% objective could pose risks to economic performance, while also noting that it continues to anticipate that inflation will move back toward its objective over the medium term," the minutes said.
Additionally, the FOMC considered adding more information to the policy statement about the contingent outlook for asset purchases. However, the committee "judged that doing so might prompt an unwarranted shift in market expectations regarding asset purchases," according to the minutes.