Federal Reserve May Move To Boost Economy

Fed policymakers appeared to move closer to a decision to add more stimulus to the economy. That's according to minutes released of the Federal Open Market Committee's meeting. The minutes didn't say what the Fed is likely to do next, but indicated many officials supported keeping the federal funds rate at "exceptionally low levels" at least through late 2014.

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STEVE INSKEEP, HOST:

NPR's business news starts with stimulus talk.

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INSKEEP: We're now able to read the minutes from the last Federal Reserve meeting - the notes of the conversation there - and it appears the Feds was moving closer to adding more stimulus to the economy. That gathering happened three weeks ago.

And as NPR's John Ydstie reports, some positive economic numbers that have come up recently may have changed the picture.

JOHN YDSTIE, BYLINE: The minutes of the meeting, released on Wednesday, show that many members of the policymaking Open Market Committee thought that added Fed stimulus for the economy would quote, "likely be warranted very soon, unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery."

Since then, data have provided a more positive picture says Sung Won Sohn, an economics professor at the University of California Channel Islands.

SUNG WON SOHN: For example, we saw healthier employment data. In addition, we saw better retail sales and production numbers as well.

YDSTIE: Professor Sohn says that makes him believe it's less likely Fed officials will take additional action to boost the economy. If they did take action, Sohn thinks in might involve trying to push down mortgage interest rates further through the purchase of mortgage-backed securities.

That possibility was discussed by Fed officials. They also discussed extending the length of time that they expect to keep interest rates exceptionally low beyond 2014.

John Ydstie, NPR News, Washington.

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