WASHINGTON – Some Federal Reserve officials are ready to provide more monetary policy easing if the recovery is too sluggish to cut the lofty U.S. unemployment rate and if inflation eases as expected, minutes of their June meeting released on Tuesday show.
Others disagreed and said that if recent increases in inflation do not moderate, the Fed should consider tightening policy sooner than expected.
Fed officials viewed the recovery as having slowed since their April forecasts, and said recent deterioration in market conditions was a particular concern because it could weigh on consumer spending.
The meeting took place June 21-22, before a government report showed employers added a scant 18,000 jobs in June.
Officials noted that investors had become more concerned about risks. They pointed to an escalation of debt problems in Greece and other European countries, as well as uncertainty over U.S. debt repayment.
“Even a short delay in the payment of principal or interest on the Treasury Department’s debt obligations would likely cause severe market disruptions and could also have a lasting effect on U.S. borrowing costs,” the Fed minutes read.
Financial Post
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http://business.financialpost.com/2011/07/12/some-fed-officials-would-consider-qe3/
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