While no decisions were made, policymakers appeared skeptical of yield curve control, alternately described as a “target” or “cap” in the Fed’s minutes, which were released on Wednesday.
NEW YORK: The Federal Reserve edged towards a longer-range plan for monetary policy at its meeting last month, raising serious questions about a strategy known as yield curve control that is untested in the United States, and signaling it may rely on explicit promises about its inflation or employment goals to steer public expectations.
Minutes from the US central bank’s June 9-10 meeting indicate policymakers held a lengthy debate about the critical next steps they may take in setting monetary policy for what they hope will be a continued recovery from a pandemic-driven health and economic crisis.At the centre of discussion: whether to import the sort of long-term interest rate targeting currently used by the Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA), and what statements or “forward guidance” to make in the coming months about its plans for the recovery period.
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