Fed pours cold water on hopes of new easing

City A.M. Reporter
FEDERAL Reserve policymakers have backed away from the need for another round of monetary stimulus as the US economy gradually improves, denting stock markets and pushing the dollar up against several currencies.

Minutes of the central bank’s meeting published last night showed only two of the policy-setting Federal Open Market Committee's 10 voting members saw the case for additional monetary stimulus.

That was a big shift from January, when several officials thought economic conditions might warrant a third round of bond purchases to boost growth.

The Fed's assessment of the economy remained cautious as policymakers worried about a still elevated US jobless rate and potential risks to the recovery.

The more hands-off tone on policy also contrasted sharply with comments last week from Fed chairman Ben Bernanke, whose focus on high unemployment led investors to believe he might be getting ready to deliver another round of monetary stimulus, known as quantitative easing.

Still the Fed remains sober about US prospects, expressing uncertainty over the course of the economy over the next few years.