Fed to keep policy loose
A SLUGGISH recovery and continued risks to the economy saw the Federal Reserve hold rates at its August meeting, but said its $300bn (£184bn) Treasury purchase programme would end in October “in light of the evolving economic outlook and conditions in financial markets”.
The minutes showed that “most participants saw the economy as likely to recover only slowly in the second half of this year, and all saw it as still vulnerable to adverse shocks”.
Policy makers also discussed slowing down purchases of mortgage bonds to minimise disruptions at the end of their programme.
Paul Dales at Capital Economics, said: “The minutes suggest the Fed would probably prefer to keep policy too supportive for too long rather than risk extinguishing the recovery and sending the economy back into recession.”