Many at Fed Ready to Act if Growth Doesn't Pick Up

[alp227]

Source: NY TIMES

Federal Reserve officials in their last meeting discussed a "number of policy tools" that the central bank might use to further stimulate the economy in the face of the weakening recovery, an official account released on Wednesday said, but they remained in wait-and-see mode.

"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," the account of the meeting that ended Aug. 1 said.

With few signs of a substantial and sustainable strengthening evident this summer, the report will likely solidify investors' expectations that the bank will take new measures this fall.

Read more: http://mobile.nytimes.com/2012/08/23/business/economy/fed-members-saw-new-action-unless-recovery-quickens.xml

[drm604]

1. What can they do at this point that would actually be stimulative?

All they can do is purchase assets, mostly from people who won't spend the money in the economy.

The federal government has to spend money on infrastructure, creating jobs that will put money in the pockets of people who will spend it.

[cstanleytech]

2. But the problem is that wont happen because the Republicans in congress want to stop the economy

from showing a recovery because they (the republicans) stated that their single goal is to make Obama a one term president regardless of the cost to the country.

[drm604]

3. I understand that.

I'm just saying that that's what is needed. What the Fed has done and may do is probably better than nothing, but not much better.

[MannyGoldstein]

4. Let me guess...

Making the overnight lending rate to banks negative, so banks can make money just by borrowing money?