Stocks Steady After Release of Fed Minutes

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A few committee members who supported the June increase "indicated that they were less comfortable" with the forecasts for additional hikes through the end of next year because of concerns that inflation would remain below the Fed's 2% annual target, the minutes said.

After that meeting, the Fed announced it planned to start reducing the balance sheet sometime this year but provided no timetable.

There were divisions over the timing of starting the balance sheet reduction with several members wanting to start within a couple of months while others wanted to wait until later in 2017.

The Fed voted in June to raise short-term rates by a quarter point to a range of 1 to 1.25 percent, the third quarter in a row the bank has lifted rates. The decision was almost unanimous, with eight members of the committee voting in favor and only one voting against it.

Longer-term interest rates have declined this year.

Some policymakers since then, however, have shown increasing worry about the Fed's struggle to get inflation back to its 2 percent objective.

The minutes showed the Federal Reserve is focusing intently on this challenge, as it tries to walk an uncertain line between coaxing along a still-mediocre economy and preparing for the next potential economic crisis. Others pushed for more time to first see how the broader USA economy fares during the second half of 2017. By taking the bonds off the market, the Fed helped to encourage lower long-term interest rates that made it less expensive for consumers and businesses to borrow.

"The information reviewed for the June 13-14 meeting showed that labor market conditions continued to strengthen in recent months and suggested that real gross domestic product (GDP) was expanding at a faster pace in the second quarter than in the first quarter", the minutes read. Meanwhile, U.S. officials will soon confront the challenge of raising the debt ceiling to continue to fund the government. But Ms. Yellen downplayed the extent of the Fed's concerns at a news conference after the Fed's June meeting. This is because a rate hike can have an impact at a lag.

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Yellen said last month that asset valuations look "somewhat rich" using traditional metrics like price-earnings ratios.

The strengthening job market left majority comfortable with raising a key short-term rate last month.

William Dudley, the president of the Federal Reserve Bank of NY, has suggested the Fed might need to raise rates more quickly in order to achieve its goals.

The minutes from the June meeting noted that the Fed's recent rate increases are beginning to be felt among some American borrowers, especially the less wealthy. They think the Fed will skip a rate hike that meeting. It can take a lot of action and not hurt the stock market. "I wonder whether or not the Fake News Media will so report?" "They definitely want to get off the emergency", Cramer said on "Squawk on the Street". "So it might be time to curtail some of that".

Financial conditions were also debated at the meeting, with some participants arguing that "increased risk tolerance" among investors could be lifting asset prices.

Some members of the Federal Open Market Committee, which sets the benchmark USA interest rate, also expressed concern that Wall Street stocks were overvalued. As the Fed raises rates, lenders have lowered borrowing costs, the opposite of the effect intended by the central bank.

The Fed's preferred measure of underlying inflation slipped again in May to 1.4 percent, the Commerce Department reported on Friday, and has run below target for more than five years. In the press conference, Yellen said the system was created to be as orderly and predictable as possible, and that the Fed hoped it would be as exciting as "watching paint dry".

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