Steel Stocks Hit 52-Week Highs
At the Dec. 15-16 meeting where FOMC members ruled to keep interest rates at near-zero levels for an extended period, the minutes revealed differing views among officials concerning inflation risks. While members agreed that lower labor and marginal costs had kept inflation in check, some expressed concern that rising commodity prices could lift inflation pressures.
The committee agreed to maintain a close watch on these factors.
"To keep inflation expectations anchored, all participants agreed that monetary policy would need to be responsive to any significant improvement or worsening in the economic outlook and that the Federal Reserve would need to continue to clearly communicate its ability and intent to begin withdrawing monetary policy accommodation at the appropriate time and pace," according to the freshly-released minutes.
Policy was another area of discord as some officials questioned whether a sustainable recovery was possible without government support. The still-suffering housing sector presented particular concern regarding plans to exit government support programs.
"They noted the risk that improvements in the housing sector might be undercut next year as the Federal Reserve's purchases of mortgage-backed securities wind down, homebuyer tax credits expire and foreclosures and distress sales continue," the minutes read.
The labor market warranted considerable attention as members widely agreed that improvements would be more gradual than in previous recessions. Even as retailers like Amazon.com (AMZN Quote) and other companies have seen signs of improved consumer spending, members noted that even businesses seeing higher demand for products, are still cautious when it comes to adding jobs and increasing capital spending since the economic outlook remains uncertain.
Loading Comments...