Federal Reserve officials Last month supported providing advance notice before the central bank makes changes to $ 120 billion a month Bond purchase.

The minutes of those discussions released on Wednesday show broad support for adding language to the Fed’s policy statement to indicate that purchases will continue „until significant further progress is made“ toward achieving maximum employment and the central bank’s price stability goals.

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Language that was added at the December meeting was seen as a way for the Fed to reassure financial markets that there will be no quick end to the purchases. The central bank is buying monthly bonds to provide more assistance to an economy that is struggling to exit from Coronavirus caused by a pandemic Economic recession that led to millions of job losses.

The Fed’s move appears to be aimed at avoiding an early spike in market-induced borrowing costs that could boost interest rates on mortgages, auto loans, and other consumer and business borrowing activities.

The minutes indicate that many Fed policymakers stressed that any changes in the volume of purchases should only take place after the Fed „clearly communicated“ its changing assessment of the economic situation „long before“ the time it planned to change the pace. Or the volume of bond purchases.

Monthly purchases of $ 80 billion in Treasury bonds and $ 40 billion in mortgage-backed securities are aimed at putting downward pressure on long-term interest rates. This is at a time when the Federal Reserve lowered the rate of its main policy governing short-term interest rates to a record low from zero to 0.25% and indicated that it plans to keep that rate low at least until the end of 2023.

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Focusing on clear communications is due to one of federal communications‘ worst mistakes. In 2013, then-chairman Ben Bernanke suggested that the Fed might soon start curtailing its bond purchases that were made to put downward pressure on interest rates to bolster the tepid recovery after the 2008 financial crisis.

Bernanke’s statement surprised the markets and triggered an immediate jump in bond yields. Fed officials had to hurry to reassure investors that no immediate cut in bond purchases was planned. The incident has been called a „tantrum“.

The FOMC’s December debate minutes, released on Wednesday after the usual three-week delay, did not clarify what could constitute „substantial additional progress“ in achieving the central bank’s economic goals. The minutes said officials believed that any changes to bond purchases would not be based on „specific numerical criteria or thresholds.“

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The Fed meets next on January 26-27 and analysts believe it will leave the benchmark interest rate at the very low level it has been since last March with bond purchases continuing at the same pace as they are now.

Analysts said the December meeting minutes reinforced that view. Bash Ashworth, chief economist at Capital Economics, said the December meeting revealed that “Fed officials are in no hurry to change the monthly pace or composition” of bond purchases.

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Several Federal Reserve officials have warned that the winter months could see a slowdown in activity due to an increase in coronavirus cases with the potential for more government assistance. Congress last month approved a $ 900 billion relief package, and President-elect Joe Biden has said he will pay for more aid after taking office on Jan.20.