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Two months before he became Federal Reserve chair, Jerome Powell urged a gradual approach to raising interest rates so that the U.S. central bank could more adequately assess the true strength of the labor market against tepid inflation, foreshadowing a cautiousness on policy that would persist under his leadership until the coronavirus crisis and its aftermath forced a wholesale change.
Transcripts from the Fed’s 2017 policy meetings released Friday showed Powell, then a Fed Board governor, navigating through that year’s major policy shifts—the start of balance sheet reduction and a pick—up in the pace of interest rate increases—against a backdrop of sluggish inflation and a job market he and others viewed as approaching full employment....