Fed to stick with current policy
Several Federal Reserve policymakers last month thought the US central bank might need to do more to prop up the economy if the recovery stumbles, but there was almost no support for extending its so called Operation Twist programme, due to end in June. Minutes of the Fed’s most recent policy-setting meeting, released last night, suggested officials were inclined to stay their current course, given a “moderately” expanding economy and a seemingly improving employment market. But while half saw risks to the outlook as broadly balanced, nearly all the rest saw dark clouds on the horizon, both at home and abroad. “Participants identified several downside risks to the projected pace of economic expansion, including the fiscal and financial strains in the euro area and the possibility of an abrupt fiscal consolidation in the US,” the minutes said.