Federal Reserve officials began debating at their June meeting when and how they would reduce the monthly bond purchases that they have used to keep longer-term interest rates in check.
The discussions, revealed in the minutes of the Fed’s June meeting released Wednesday, indicate that the Fed is moving closer to tapering those purchases, though most analysts don't expect a reduction until late this year.
In a statement issued after its June 15-16 meeting, Fed officials signaled that they would potentially dial back their low-interest rate policies sooner than they had previously indicated. The policymakers forecast that they would hike the Fed's benchmark short-term interest rate twice by the end of 2023. In March, they had indicated no rate hikes would occur before 2024.
An earlier rate hike suggests that the Fed could move up the timetable for reducing its bond purchases. The Fed is buying $120 billion a month in Treasury securities and mortgage-backed bonds to keep longer-term interest rates low and encourage more borrowing and spending. It has said that it will keep making the purchases until the economy makes “substantial further progress” toward its goals of full employment and an inflation rate slightly above 2%.
Most economists still expect a reduction, or tapering, of those purchases to begin by late this year or early next year, with an announcement of the change potentially occurring in late August at the Fed's annual conference at Jackson Hole, Wyoming.
Some differences over the timing of the tapering have emerged among the Fed's regional bank presidents, with Dallas Fed President Robert Kaplan saying last week that he favored pulling back on the purchases “sooner rather than later.”
Yet San Francisco Fed President Mary Daly, in an interview with The Associated Press, said last week that it would be “appropriate” to consider tapering later this year or early next year. But she cautioned that the economy is “far from full employment,” one of the Fed's two goals, along with price stability.
An independent watchdog within the IRS reports that while taxpayer services have vastly improved, the agency is still too slow to resolve identity theft cases. And National Taxpayer Advocate Erin Collins says those delays are “unconscionable.” Erin M. Collins said in the report released Wednesday that overall the 2024 filing season went smoothly, though IRS delays in resolving identity theft victim assistance cases are worsening. It took nearly 19 months to resolve self-reported identity theft cases as of January, and Wednesday's report states that now it takes 22 months to resolve these cases.
Amazon.com Inc. surpassed $2 trillion in market value for the first time in afternoon trading on Wednesday. The push higher for Amazon’s stock market valuation comes a little more than a week after Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia’s chips are used to power many AI application and its valuation has soared as a result. Amazon has also been making big investments in AI as global interest has grown in the technology. Most of the company’s focus has been on business-focused products.
