Fed minutes show officials expect continued gradual reductions in monthly bond purchases

WASHINGTON – Federal Reserve officials agreed at their January meeting that further gradual reductions in their stimulus would be appropriate as long as the economy keeps improving.

Officials discussed the need to stress to investors that the Fed’s key short-term interest rate would remain near zero, according to the minutes of the Jan. 28-29 meeting. But they couldn’t agree on how to modify their commitment to keep the rate near zero “well past” the time unemployment falls below 6.5 per cent. The rate is now 6.6 per cent.

After that meeting, the Fed said it would further cut its monthly bond purchases beyond the cut it made in January. The bond purchases are intended to keep rates low to spur spending.