MW: Fed, in July, remained on taper track by year-end
By Greg Robb
WASHINGTON (MarketWatch) - Almost all of the Federal Reserve officials at their July meeting backed Fed Chief Ben Bernanke's stance that the Fed would slow down the pace of its $85 billion-per-month asset purchase plan later this year if economic conditions continue to develop broadly as expected, according to the minutes of the conclave released Wednesday. The central bankers did not signal as to whether such a taper would come in September, October or December, the three remaining meeting dates. There were few signs that a majority was poised to pull the trigger at the September meeting. While a "few" argued that "it might soon be time to slow somewhat" the pace of asset purchases, another "few" counseled patience. The central bankers considered, but decided again, adding language to the policy statement on the data-dependent taper plan, fearing market overreaction. After initial turmoil in the wake of its June meeting, Fed officials thought generally that the market expectations had settled down by late July and were "aligned" with Fed views. Some officials said they were happy that interest rates had risen and there had been an unwinding of speculative positions. The Fed also discussed setting up a new overnight reverse repo facility to use as a new tool to accomplish its exit strategy.
