Fed Officials Weighed Need to Help Economy Further

Federal Reserve officials
By Martin Crutsinger

WASHINGTON (AP) - Federal Reserve officials spoke with increased urgency at their last meeting about the need to provide more help for a weak U.S. economy.

Many members felt further support would be needed "fairly soon" unless the economy improved significantly, the minutes of the July 31-Aug. 1 meeting show. The minutes didn't say what steps might be taken. The boldest move would be to launch a new program of bond buying to try to lower long-term interest rates to encourage more borrowing and spending.

The minutes show many officials favored pushing the timetable for any increase in record-low short-term rates beyond the Fed's current plan of at least late 2014. Many economists think the target will be extended to mid-2015. This language might be altered at the September meeting, the minutes indicate.


Related Stories

Early reaction in the stock market was positive but muted. The Dow Jones industrial average rose modestly. It was down about 70 points at 2 p.m. Eastern time, when the Fed minutes were released, and down 30 points several minutes later. The yield on the benchmark 10-year U.S. Treasury note dipped slightly, to 1.74 percent from 1.75 percent earlier.

The price of gold, which traders sometimes buy as a hedge against inflation, jumped about $10 an ounce, to $1,650, its highest point since early May.

The minutes released Wednesday cover the July 31-Aug. 1 policy meeting. The Fed releases the minutes of its private discussions three weeks after each meeting. The policy committee will meet next Sept. 12-13.

After its August meeting, the Fed announced no changes to policy. But in a statement afterward, it appeared to signal a growing willingness to take further steps to boost the economy if it doesn't improve. The Fed noted that growth had slowed in the first half of the year. In particular, it pointed to lackluster job growth and consumer spending.

The issue of whether the Fed will actually change policy in a major way in September has been thrown into doubt by recent economic indicators showing a bit more strength in such areas as hiring and consumer spending.

Many analysts are looking to a speech by Federal Reserve Chairman Ben Bernanke at an annual Fed conference in Jackson Hole, Wyo., to possibly provide more guidance on the Fed's next moves.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

10 Comments

Filter by:
Matt

That printed money goes somewhere: stock market (1929), Savings and Loan institutions (1980s), dot-com stocks (1990s), housing (2000s), government bonds (2012-???)...

August 24 2012 at 2:52 PM Report abuse rate up rate down Reply
jhrooney

Bernake is so in love with funny money he has been printing, he can't tell the real currency any more. He won't jawbone congress and the president toward gettng spending in line. He wants to keep his job or at least go back to academia.

August 23 2012 at 11:27 PM Report abuse rate up rate down Reply
sniphair

\PLEASE TELL ME HOW A MAN LIKE BERNAKE COULD POSSIBLE THINK THAT BY PRINTING MORE MONEY, WHICH HE'S DONE TWICE BEFORE, AND BUY MORE BONDS TO LOWER INTEREST WHICH ARE AT A LEVELS THATS ARE DEPLORABLE & LAUGHABLE. THE LOWERING OF THE PRIME TO 3% & 0% OVERNITE RATE, WHICH WAS DONE 4 YRS AGO THIS DECEMBER. BY DOING THAT HE HAS DONE NOTHING BUT DESTROY THE ECONOMY & COMPLEATELY STOP PEOPLE FROM SAVING $. THE CLOTH OF WHICH THIS COUNTRY WAS BUILT ON.

August 23 2012 at 6:24 PM Report abuse rate up rate down Reply
Jetncat

The Feds have done enough messing with our currency. They should step away from the printing press and GIVE IT A REST! If we truely are a free market society then they should put up or shut up and let things just work themselves out. It can't get any worse than what they have done. I bet things will get better if only.......... WE TRUST THE AMERICAN CONSUMER AND BUSINESSES ONCE AGAIN!

August 23 2012 at 1:17 PM Report abuse +1 rate up rate down Reply
jdykbpl45

No more "help" please. Obama's minions are killing us.

August 23 2012 at 11:50 AM Report abuse +2 rate up rate down Reply
Manolo

When will people realize that our bigest problen are the free trade agreements!!FTA sh...!!

August 23 2012 at 10:06 AM Report abuse rate up rate down Reply
oilmlh

Devalue the dollar to pay back the Chinese in cheaper bucks. Meanwhile, here comes inflation. Need a change in Washington this November.

August 23 2012 at 5:08 AM Report abuse +2 rate up rate down Reply
papadb24

The Bro has Gotta Go!

August 22 2012 at 8:25 PM Report abuse +4 rate up rate down Reply
Somey

Not Good

August 22 2012 at 5:43 PM Report abuse +4 rate up rate down Reply
joey

Type your comment herehttp://www.foxnews.com/politics/2012/08/22/illegal-immigrants-could-reap-more-than-7b-in-tax-credits-this-year-senator/ The Obama PLAN!!! Yes HELP, HELP

August 22 2012 at 3:40 PM Report abuse rate up rate down Reply