Fed considering another round of Quantitative Easing
Barring a dramatic turnaround for the economy, Reuters reports that the latest indications out of the Federal Reserve are that another round of monetary stimulus is set to drop very soon.
Despite recent promising signs from July payrolls, the stock market and Treasury bonds, doubt remains that the economy will rebound soon, thus prompting the Fed to consider more stimuli.
Minutes from the July 31-August 1 meeting suggest that policymakers are pretty avid about their dissatisfaction with the outlook of the economy and do not expect interest rates to rise until late 2014 at the earliest. The Fed warns of the risks of an already weak U.S. economy, including the risks of looming budget cuts and tax hikes, also referred to as a fiscal cliff.
Many Fed officials are in favor of pushing back the expected timing of the eventual first rate hike and lowering the rate they pay banks to park their excess reserve in the bank, however they agreed to delay a final decision until their next meeting.
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