US Federal Reserve officials had expressed concern at their latest meeting over the future of the country’s economy amid the coronavirus pandemic, according to the minutes of the session.
In the Federal Open Market Committee’s meeting held in late July, the members told central bank officials that they had lowered their estimate for economic growth over the second half of the year.
Fed officials also said there had been an increase in uncertainty about the economic outlook since their prior meeting in mid-June.
Meanwhile, the members voted to keep short-term interest rates anchored near zero because of what they described as an economy that was falling short of its pre-pandemic levels, showed the minutes released on Wednesday.
They also reached a consensus on the need for more financial help from Congress, which went into recess without agreeing on a deal for more funding, as Chairman Jerome Powell and Fed leaders have emphasized the need for such help multiple times.
The minutes “underscored the need for a fiscal package,” said Quincy Krosby, chief market strategist at Prudential Financial. “Chairman Powell has been adamant that we need to see another package, especially because they see the negative effects of the slowdown.”
The committee members also expressed worries about whether banks and related institutions could continue to stay in what described by Powell and other Fed officials as generally strong shape if the coronavirus spread persists.
The pandemic has left the federal government $26.6 trillion in debt, but it is gaining just more than $3 trillion during the pandemic as Congress and the White House are desperately trying to get aid to those impacted by the economic shutdown.
Following the release of the minutes, Richmond Fed President Thomas Barkin said uncertainty “matters a lot for players in the economy.”
Blue-collar workers “seem frozen in place,” Barkin said in a talk to the National Economists Club, noting, “We are at a very vulnerable spot, and I don’t know what the next shoe to drop will be.”
