From the FINANCIAL TIMES:
Some policymakers at the US Federal Reserve have proposed further monetary stimulus if economic growth remains weak, marking the Fed’s first serious discussion of easing since the US economy hit a “soft patch” in the spring.
According to the minutes of its June meeting, “Some participants noted that, if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate, and if inflation returned to relatively low levels after the effects of recent transitory shocks dissipated, it would be appropriate to provide additional monetary policy accommodation.”
Further monetary action would be likely to mean more quantitative easing, similar to the $600bn QE2 round of asset purchases that the Fed completed at the end of June, aimed at driving down long-term interest rates…
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EDITOR: The Fed is desperately trying to create jobs through monetary policy that can only effectively be done through fiscal policy via a new stimulus package. Conservative Republicans are exploiting for political benefit the deficit situation they largely created and thus prolonging, if not deeping, the Great Recession.
