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Even as the U.S. economy gathered steam this year Federal Reserve officials remained cautious about the continuing risks of the pandemic and committed to pouring on monetary policy support until a rebound was more secure, minutes of the central bank’s March meeting reflect.

With their own forecasts projecting the strongest run of economic growth in nearly 40 years, “participants agreed that the economy remained far from the (Fed’s) longer-run goals and that the path ahead remained highly uncertain,” the Fed’s minutes stated on Wednesday. “Participants noted that it would likely be some time,” before conditions improved enough for the Fed to consider pulling support.

Though several policymakers at that March meeting indicated they think interest rates might need to increase sooner than the bulk of their colleagues, and perhaps as soon as next year, there was little sense of urgency around that issue in the minutes.

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Labor markets were improving, but remained gashed by the pandemic. Inflation would pick up, the minutes noted, but likely subside next year. A recent jump in U.S. Treasury yields was “generally viewed…as reflecting the improved economic outlook.”

Only a couple officials cited possible financial stability risks flowing from the Fed’s current policy of near zero interest rates and $120 billion in monthly bond purchases – a setting the Fed says is locked in until the economy is well on its way to being healed.

That process is underway, with the economy buoyed by the Fed, fiscal spending approved by Congress and the White House, and an accelerating vaccination programs

“Participants generally expected strong job gains to continue over coming months and into the medium term,” the minutes said.

Still, “participants noted that the economy was far from achieving the (Federal Open Market Committee’s) broad-based and inclusive goal of maximum employment.”

How that will be defined in practice remains unclear, and divisions among Fed officials over how much longer to keep massive central bank support in place were on display Wednesday.

Chicago Fed President Charles Evans, who agrees with the majority of his colleagues that interest rates will likely need to say near zero through 2023, said he envisions an uncomfortable period of higher inflation this year, but that the Fed shouldn’t budge until it’s sure that prices won’t just fall back again below the Fed’s 2% inflation goal.

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“We really have to be patient and be willing to be bolder than most conservative central bankers would choose to be,” he told reporters.

Separately, Dallas Fed President Robert Kaplan reiterated his longstanding worries that low rates and the Fed’s bond purchases could fuel excesses and imbalances in markets.

Once the pandemic has receded, he said, the Fed should pare its bond buying and move toward raising rates in 2022, and signaled he may even be open to doing both at once.

“My thought is the tapering would come first,” Kaplan said in a virtual discussion organized by UBS. “I think in my mind it would be substantially completed before you dealt with Fed funds rate, but I would like to retain flexibility on that.”

NO CHANGES AT MARCH MEETING

At the March 16-17 meeting, the Fed made no changes to its near zero target interest rate or the $120 billion pace of monthly bond buying, and also did not change its standing pledge to keep all of that in place until the economy is recovered from the lost jobs and other financial damage done by the pandemic and the sharp associated recession.

But Fed officials did boost their outlook for the economy by a significant margin as they surveyed progress on the vaccines and the trillions of dollars in newly committed federal spending and concluded the economy was primed.

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The median Fed policymaker projection for economic growth in 2021 was increased from 4.2% as of December to 6.5%, which would if achieved be the fastest rate of expansion since 1984.

Even with its policies unchanged, the outcome of the meeting suggested an evolving debate among policymakers about just how quickly recovery may occur, with four officials, including Dallas Fed’s Kaplan, projecting a rate increase may be appropriate as early as next year.

That is much faster than the core of officials who don’t expect rates will need to rise until at least 2024.

A shift in Fed strategy last year saw the Fed put a higher premium on encouraging employment, and saying it wanted inflation to run above its formal 2% target “for some time” in order to offset years when the pace of price increases was too weak.

That new framework was adopted unanimously. But the shift of several policymakers’ views prompted some second guessing about whether the commitment is as deep as presented.

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