Federal Reserve Leaning Away From QE3?Submitted by shifty1032231 on Tue, 04/03/2012 - 16:43
Stopping QE3/Operation Twist is hard to believe
NEW YORK (CNNMoney) -- While the debate over "QE3" continues within the Federal Reserve, it seems more policymakers are leaning away from supporting further stimulus.
At the central bank's last policymaking meeting, Fed officials continued to discuss whether they should buy more assets in a third round of quantitative easing, commonly known as QE3.
But only "a couple" members were in favor of more stimulus, as opposed to two months earlier, when a "few" did so.
"A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate consistent rate of 2% over the medium run," minutes released Tuesday said.
The Fed's language on the overall economy also seemed more upbeat than in January, pointing to "encouraging" jobs data.
Since the financial crisis, the Fed has purchased $2.3 trillion in Treasuries and mortgage debt in the first two rounds of quantitative easing. The intent is that these policies will bring interest rates lower, boosting the economy by giving businesses and consumers access to cheaper credit.
Some members have recently indicated that by buying more mortgage backed securities, the Fed may be able to give a bigger boost to the struggling U.S. housing market.
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