The Federal Reserve's consensus about when to shrink its balancesheet and how to approach policy strategy in a time of lowinflation is starting to fragment.
Fed officials continued to view gradual interest-rate increasesas appropriate while starting the process of unwinding the centralbank's $4.5 trillion balance sheet this year, minutes from theirJune 13-14 meeting released on Wednesday showed. But their debatehighlighted divisions over the timing of the roll-off and unease atrecent weak readings on inflation.
“They don't understand why inflation is so low while they arenearing full employment,” said Julia Coronado, president ofMacroPolicy Perspectives in New York.
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