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Federal Reserve policy makers are considering tweaks to monetary policy that could result in the U.S. central bank sticking with aggressive stimulus measures far longer than under its previous rubric, minutes from their most recent policy meeting showed.

The readout of the Fed’s July 28-29 meeting, published on Wednesday, also showed policy makers concerned that a recovery from the economic downturn triggered by the coronavirus pandemic faced a highly uncertain path. For instance, they judged that the swift rebound in employment seen in May and June had likely slowed and that additional “substantial improvement” in the labour market would hinge on a “broad and sustained” reopening of business activity.

The minutes also showed policy makers were nearing agreement on changes to the Fed’s policy framework, including changes to its periodic Statement of Longer-run Goals and Monetary Policy Strategy.

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Fed officials “agreed that … refining the statement could be helpful in increasing the transparency and accountability of monetary policy,” the minutes reported.

“Participants noted that the Statement on Longer-Run Goals and Monetary Policy Strategy serves as the foundation for the Committee’s policy actions and that it would be important to finalize all changes to the statement in the near future.”

Policy makers decided to revamp their policy approach in late 2018, when they worried that low inflation and low interest rates globally would mean they would need stronger tools than before to combat future recessions.

That was well before the pandemic ended a record-long period of growth and sent the world’s biggest economy into its sharpest downturn since the 1930s.

The Fed responded by slashing interest rates, buying trillions of dollars of bonds, launching a raft of brand new lending programs, and signalling it expects to deliver years of extraordinary support to revive growth.

At the current juncture, with the unemployment rate at 10.2 per cent, drastic cuts this month in government aid to households and businesses, and the virus continuing to spread, changing the Fed’s overarching framework may make little short-term impact on policy.

But it could signal the Fed’s readiness to keep its foot on the monetary gas pedal, and perhaps to take even more aggressive action ahead.

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At the July policy meeting, all 10 voting members of the policy-setting committee agreed to leave the target range for short-term rates between 0 per cent and 0.25 per cent, where it had been since March 15 when authorities began shutting businesses to contain the spread of the virus.

They also said the outlook for the economy hinged on the outlook for the virus, which has now killed more than 171,000 people in the United States, according to a Reuters tally.

Since last month, the number of new daily coronavirus infections has dropped, but is still averaging more than 50,000. In some parts of the country, schools have had to delay, reverse or abandon plans to conduct in-person classes, putting a strain on working parents.

One policy maker, Minneapolis Fed president Neel Kashkari, has lobbied for a new nationwide lockdown to get the virus under control, trading short-term economic pain for a quicker end to the pandemic.

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