Fed Waffles Over Need for More Stimulus

Some members push more action, others think it's Congress' job
By Mark Russell,  Newser Staff
Posted Jul 12, 2012 12:03 AM CDT
Fed Waffles Over Need for More Stimulus
The Federal Reserve is divided about what action to take to get the economy going, according to transcripts of the latest Fed meeting.   (Shutterstock)

(Newser) – With the US economy stalled, eurozone in crisis, and Chinese economy slowing down, the Federal Reserve is increasingly talking about action to boost the American economy, reports the LA Times. But for now the central bank is divided about the need for action, according to the just-released minutes for its last meeting in June. Just what the Fed can do at this point is a big question—a third round of quantitative easing is possible, but unlikely, and some say the ball is in Congress' court to goose the economy via fiscal policy.

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Normally the Fed cuts interest rates to stimulate a weak economy, but with rates already close to zero, it has been forced to try unconventional and risky approaches to kickstart business, approaches that make some Fed members worry about inflation down the road, notes the Wall Street Journal. "We're really right at that edge," said Federal Reserve Bank of San Francisco president. "If economic data continue to come in below expectations, then I would think we need more accommodation." (Read more Federal Reserve stories.)

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