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Hearing WSJ's Hilsenrath Has Said Fed Minutes Could Show an Amicable Taper Decision

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"Minutes of the Federal Reserve's Dec. 17-18 policy meeting could show that the Fed's big decision last month to start winding down an $85 billion monthly bond-buying program was a mostly amicable event. The Federal Reserve releases minutes of the December policy meeting today at 2 p.m. In the past, minutes have shown high levels of discord among officials about tough policy decisions. But there doesn't appear to have been a great deal of debate at this meeting. Fed Chairman Ben Bernanke signaled at his post-meeting press conference that there was broad agreement about the action. When asked if the decision was a close call, Mr. Bernanke didn't take the bait. Instead, he said "there was a pretty widespread view" that the Fed's criteria for pulling back the program were on course to being met. That isn't to say there was no disagreement. Boston Fed President Eric Rosengren dissented, because he thought scaling back the program back was premature and some Fed "hawks" wanted to pull back the program more aggressively. But broadly many officials got what they wanted. Internal skeptics of the program got a roadmap for its eventual end, while supporters were assured it would be a gradual process that could be reversed if needed.

This is an important development for Fed Vice Chairwoman Janet Yellen, who will become Fed chairwoman Feb. 1, after Mr. Bernanke's term ends. It ensures that the first few months of her term, at least, won't be consumed with the difficult task of building consensus for action. That has already happened. Her first task will be carrying through with the plan, or altering it if the economy veers off the course the Fed expects."

By Jon Hilsenrath

Posted-In: News Futures Federal Reserve Markets

 

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