The U.S. Federal Reserve would lean more close toward new stimulus actions unless incoming information signifies a substantial strengthening in the economic recovery, the central bank's policy meeting minutes showed on Wednesday.
"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 Fed noted in minutes released on Wednesday for a Federal Open Market Committee (FOMC) meeting held from July 31 to Aug. 1.
In their discussion for future policy action, a number of Fed policy officials indicated that additional accommodation could help foster a more rapid improvement in labor market conditions when inflation pressures were likely to be subdued.
Several FOMC members said the benefits of gathering further information that could help clarify the economic outlook and inflation as well as the need for further policy action, according to the minutes.
The Fed officials agreed that they would closely monitor economic and financial developments and carefully weigh the potential benefits and costs of various tools in assessing whether additional policy action would be warranted.
At its last meeting, the Fed did not pull the trigger to save the economy, but left the door open for additional measures.
In June, the central bank decided to extend through the end of the year the Operation Twist, a program intended to push down long- term interest rates. The minutes for the June meeting showed divergence on whether a new round of quantitative easing, dubbed QE3, was warranted, as only "a few members" favored further stimulus.
The minutes released on Wednesday signaled growing support within the Fed on new steps of monetary easing.
The Fed officials said the information received over the intermeeting period indicated that economic activity had decelerated in recent months, with a notable slowing in consumer spending.
The FOMC members generally expected that the economic growth would be moderate over coming quarters and then would pick up very gradually.
While most members did not view the medium-run economic outlook as having changed significantly since the June meeting, several members had lowered their expectations for economic growth over coming quarters.
Fed Chairman Ben Bernanke would give speech next week at the annual economic symposium conference in Jackson Hole, Wyoming, from which the investors are likely to get clue on the Fed's policy intentions.
The FOMC's next meeting is scheduled for Sept. 12-13. The market expected that the possible monetary easing measures would include the purchase of mortgage-backed securities.
