A third round of “quantitative easing” could be coming soon from the Federal Reserve if the economy does not pick up steam, according to minutes released Wednesday.
Several members of the Federal Open Market Committee (FOMC) said the Fed will need to do more to boost the economy if the recovery doesn’t gain momentum, according to the minutes of a July 31 meeting.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” the minutes stated.
The Fed is likely to be accused of playing politics if it takes action before November, as the slow economy is considered to be the biggest obstacle for President Obama’s reelection bid.
“Many participants” of the FOMC said another massive round of bond purchases — the “quantitative easing” — could help support the economic recovery while boosting business and consumer confidence. However, a “few” members aired concerns that a further expansion of the Fed’s balance sheet could increase risk in the financial system, and make it more difficult for the central bank to unwind those moves later on.