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Fed holds back on stimulus expansion
Federal Reserve Bank officials are unlikely to expand efforts in the near future to stimulate growth, minutes from last month’s meeting suggest.
The official account of the June 19-20 meeting, released Wednesday, said “a few” of the 12 board members expressed the view further policy stimulus “likely would be necessary to promote satisfactory growth in employment” and to keep inflation in check.
“Several others noted that additional policy action could be warranted if the economic recovery were to lose momentum, if the downside risks to the forecast became sufficiently pronounced, or if inflation seemed likely to run persistently below the committee’s longer-run objective,” the minutes said.
The Fed said “a variety of indicators showed smaller gains than had been anticipated.” Concern over possible fallout from the European debt crisis was also raised at the meeting.
Some Fed officials opposed additional stimulus action because they were concerned that it would raise the pace of inflation, The New York Times said.
Copyright 2012 by United Press International