The minutes of the recent Fed meeting said members are already considering a possible tightening of monetary policy, provided that the US economy grows at the same pace.
However, the document stated that some time would have to pass before significant progress will be made regarding price stability and maximum employment, which is the goal of the central bank.
Sadly, gold prices dropped in response to this news.
Meanwhile, the Fed continued to downplay the growing threat of inflation, as many members said any increase beyond 2% will be short-lived.
But they revealed a long list of potential issues that the committee is watching. Some members noted that overvalued stocks could pose a risk to the economy, while some noted the rise in housing prices.
Some members also commented on the long-drawn-out low interest rates, as well as on the positive conditions of the financial market and the opportunity to take advantage of these conditions to achieve the Fed's goal.
But they reassured that the super-soft policy will remain, at least until the economy reaches the target levels for inflation and employment.
Although the macro statistics for April reinforced their view a bit that perhaps, it is time to ease the volume of bond purchases.
Now, much will depend on the data for May, more specifically on the growth of inflation. If it jumps much faster than in April, the Fed may be forced to take action.
The next Fed meeting will be on June.