In the minutes of July 27-28 FOMC meeting, Fed said “all participants” assessed that progress were made towards the both the maximum-employment and price-stability goals. However, “most participants” judged that the standard of “substantial further progress” on employment “had not been met yet”. “Most participant” said the standard was met regarding price-stability, even though a few participants noted that “transitory nature” of this year’s rise in inflation.

“Most participant” said provided that the economy were to “evolve broadly as they anticipated”, it could be “appropriate” to start tapering “this year”. “Various participants” said the economic and financial conditions would likely warrant a reduction in purchase “in coming months”.

But “several others” indicated that tapering would more likely to be become appropriate “early next year”, as they saw prevailing conditions in labor market as not being close to the “substantial further progress” standard, or due to the “uncertainty” about progress on price stability.

Full minutes here.

Fed Chair Jerome Powell said yesterday that “it’s not yet clear whether the Delta strain will have important effects on the economy; we’ll have to see about that.” While COVID is “still with us,” he said, “people and businesses have improvised and learned to adapt.”

The pandemic is “still casting a shadow on economic activity. We cannot declare victory yet,” Powell said. But “many companies … have adapted their business models to the new world,”

Separately, Minneapolis Fed President Neel Kashkari said it’s “reasonable” to start tapering later this year. “There’s a lot of public discussion about, will it be at the end of this year, will it be the beginning of next year: Those seem like reasonable ranges of deliberation, but ultimately it will be driven by the data,” he added.

Boston Fed President Eric Rosengren said the US had over 900k jobs growth for two months in a row and unemployment rate dropped by half a percent to 5.4%. He added, “if we get another strong labor market report, I think that I would be supportive of announcing in September that we are ready to start the taper program.”

“I think it’s appropriate to start in the fall. That would be October or November,” Rosengren told CNBC. “I certainly wouldn’t want to wait any later than December. My preference would be probably for sooner rather than later.” He also said that “there’s no reason to drag it out as long as the economy continues to progress as we expect.”

On the other hand, he’d prefer to see more progress before moving on to raising interest rate. “The criteria for starting to raise rates is that we see outcomes that are consistent with sustainable inflation at a little bit above 2%,” he reiterated Fed’s general position.