The record of the Federal Reserve’s meeting last month, which surprised investors with a hawkish pivot is being scrutinised.

Bloomberg says the records are being examined today for any hints on when the central bank will pare back its support for the economy. The Fed delivered a double-whammy at the June gathering after its quarterly economic forecasts showed officials expect two rate hikes in 2023 and Chair Jerome Powell announced the central bank was getting the taper debate into gear.

“We’re watching out for any clues that we might get regarding the tapering of asset purchases,” Citigroup Global Markets Chief US Economist Andrew Hollenhorst told Bloomberg. “Any clues about the timing or the composition, but my expectations is that we won’t get too many details,” he said.

According to Bloomberg, the analysts will be combing through the minutes for details on tapering, including when it could start and what the pace might be though that level of discussion might be more likely at upcoming Fed meetings, including its gathering later this month.

Details of the minutes being released today

Minutes from the Fed’s June 15-16 meeting are scheduled to be released at 2:00 pm today (July 7). The minutes will show that the Fed has been buying US$80 billion of treasuries and $40 billion of mortgage-backed securities every month in an effort to bolster the economy during the pandemic.

After Powell indicated that the Federal Open Market Committee would start talking about when it might be appropriate to start reducing these purchases at subsequent meetings, a number of officials voiced support for starting the process sooner rather than later, including before the end of this year.

Atlanta Fed President, Raphael Bostic said that the central bank could start slowing its asset purchases in the next few months as the economy recovers faster than expected from the pandemic.

The Dallas Fed chief, Robert Kaplan, has said he wants the process to start “soon,” so as to avoid excess risk-taking in markets and so that the Fed won’t need more aggressive measures, including rate hikes, to halt financial excess later.

San Francisco Fed President, Mary Daly, customarily a more dovish member of the committee and, along with Bostic, a voter on monetary policy this year, told the Associated Press last week that a start to tapering this year may be appropriate.

Kaplan and St Louis Fed President, James Bullard have also indicated they may be in favour of tapering MBS purchases first, as surging price increases in the housing market fan worry it is overheating.

Fed concerns over recent price increases

Some Fed officials have expressed concern with recent price increases amid a quickening reopening and supply-chain constraints, while most note that it’s likely temporary. The minutes may provide a clue on whether more officials are viewing the higher inflation readings as potentially longer-lasting.

Powell and others have said that the US is likely to see robust payrolls growth this summer and into the fall. The economy has averaged more than 600,000 new jobs per month since January, including 850,000 in June, the biggest gain in 10 months, government data released last week showed.

Reports of businesses, especially in the restaurant industry, struggling to find workers indicate to some Fed officials that the labour market is tightening.

Morgan Stanley economist, Ellen Zentner said in a note published yesterday that the jobs report doesn’t indicate a big swing toward maximum employment, but does keep taper talks on the table.

Policymakers were also more hawkish in June about interest-rate tightening. Fed watchers will be on the lookout for any hint in the minutes of discussion around normalizing rates, including how policymakers are thinking about their new framework, which aims to average inflation at two per cent over time and mitigate employment shortfalls.