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August 19, 2020 2:30 PM, EDT

Fed Minutes Note Consumer Spending Rebound, Uncertainty

The Marriner S. Eccles Federal Reserve building stands in Washington, D.C.The Marriner S. Eccles Federal Reserve building stands in Washington, D.C. (Andrew Harrer/Bloomberg News)

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U.S. central bankers noted the rebound in consumer spending at their last meeting but repeated their view that the path of the recovery would depend on containment of the virus.

“Members agreed that the ongoing public health crisis would weigh heavily on economic activity, employment and inflation in the near term and was posing considerable risks to the economic outlook over the medium term,” according to minutes published Aug. 19 of the Federal Open Market Committee’s July 28-29 meeting, conducted via video conference. “Participants saw less improvement in the business sector in recent months, and they noted that their district business contacts continued to report extraordinarily high levels of uncertainty and risks.”

Federal Reserve officials left interest rates unchanged near zero at the gathering and continued to buy Treasury and mortgage-backed bonds at a pace of about $120 billion a month: actions that were aimed at nursing the economy through the severe recession triggered by the coronavirus pandemic.

At a press conference following the meeting, Fed Chairman Jerome Powell said the path forward for the economy was “extraordinarily uncertain” and would depend on containing the virus. Results on that front have been mixed, with infections rising in several U.S. states, potentially weakening the recovery.

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