made toward the central bank’s maximum
employment and price stability goals.
The language added at the December meeting
was seen as a way for the Fed to assure financial
markets that there would be no quick end to
the purchases. The central bank is making the
monthly bond buys to provide further help
to an economy struggling to emerge from a
pandemic-induced recession that has seen the
loss of millions of jobs.
The Fed move appears aimed at avoiding a
premature market-triggered rise in borrowing
costs that could could boost interest rates for
mortgages, auto loans and other consumer and
business borrowing activity.
The minutes note that various Fed policymakers
stressed that any changes to the size of the
purchases should only be made after the
Fed had “clearly communicated” its changed
assessment of the economic situation “well in
advance” of when it planned to make alter the
pace or size of the bond purchases.
The monthly purchases, made up of $80 billion
in Treasury bonds and $40 billion in mortgage-
backed securities, are aimed at putting
downward pressure on long-term interest rates.
This at a time when the Fed has cut its key policy
rate governing short-term interest rates to a
record-tying low of zero to 0.25% and indicated
it planned to keep the rate that low at least
through the end of 2023.
The emphasis on clear communications harkens
back to one of the Fed’s worst communication
blunders. In 2013, then-Chairman Ben Bernanke
suggested that the Fed might soon begin
tapering its bond purchases that were being