Fed Debated How to Begin Pulling Back on Stimulus at June Meeting

Federal Reserve officials debated last month how and when to start pulling back their extraordinary support for an economy growing much stronger than they expected earlier this year.

Minutes of their June 15-16 Fed meeting, released Wednesday, also revealed the degree to which the policy makers revised their economic outlook due to a double-barreled boost from vaccinations and fiscal stimulus as well as bottlenecks and supply shortages.

Fed officials are set to ramp up deliberations at their next meeting, July 27-28, over when and how to reduce their $120 billion in monthly purchases of Treasury and mortgage securities.

At last month’s meeting, 13 of 18 officials projected they would raise interest rates from near zero by 2023, with most expecting to raise their benchmark rate by 0.5 percentage point. Seven expected to raise rates next year. In March, most officials expected to hold rates steady through 2023.

The projections revealed growing divisions over the likely path for policy two years from now and jarred some investors who hadn’t expected more officials to project a need for more rate rises over the next 2½ years.