WASHINGTON — Federal Reserve policymakers are open to further efforts to stimulate the U.S. economy if growth falters or threats escalate.
Minutes of the central bank’s April 24-25 meeting released Wednesday stated that “several members” thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.
The minutes did not spell out what circumstances would trigger further Fed efforts to lower interest rates to boost the economy. But they did note some threats to the U.S. economy. One is Europe’s debt crisis. Another is the risk that growth may slow if spending cuts and tax increases take effect at year’s end because Congress can’t reach a budget agreement.
The comments stood in contrast to the previous minutes, which said that only “a couple” of members expressed support for further bond purchases. Since the financial crisis, the Fed has pursued two rounds of bond purchases to try to push down long-term interest rates, with a goal of encouraging borrowing and spending.
Private economists said the change in wording to “several” from “a couple” raised the possibility of further Fed action. But analysts said they still think no further moves will occur unless Europe’s crisis worsens or a budget impasse in Congress threatens the U.S. economy.
“Nothing in the minutes changes our view on policy,” said Sal Guatieri, senior economist at BMO Capital Markets.
The Fed also announced Wednesday that for the rest of this year and next year, all of its meetings will last for two days to allow more time for discussion. Until now, some policy meetings had lasted only one day.
After April’s meeting, Chairman Ben Bernanke left open the possibility of further Fed action to stimulate the economy. Private economists generally say another round of Fed bond buying isn’t likely unless the economic outlook darkens considerably.
Bernanke said at his news conference that more bond purchases, or other steps by the Fed, were still an option if the economy weakens. He declared that “those tools remain very much on the table.”
