Fed officials will consider deeper rate cuts and a "substantial further easing of policy" if the turmoil in the credit and housing markets continues, according to minutes of last month's meeting. Officials displayed surprise at the extent of the housing crisis and acknowledged that market strains "could persist for quite some time," the Wall Street Journal reports.
"Participants agreed that the housing correction was likely to be both deeper and more prolonged than they had anticipated in October," the minutes say. During the meeting, the Fed cut a key interest rate for the third time since September. While some held out the possibility that conditions could improve, the general tenor of the minutes was negative, the Journal notes.