Fed Downplays Chances for QE3
NEW YORK (TheStreet) -- The Federal Reserve downplayed the prospects for more quantitative easing in the minutes of its most recent policy meeting on Tuesday, sending stocks to their lows of the day.
The minutes from the March 13 meeting of the Federal Open Market Committee stated that it was "prepared to adjust the size and composition of its securities holdings as appropriate to promote a stronger economic recovery in a context of price stability."
The FOMC went on to say that a "couple" of committee members would support additional stimulus if certain conditions came to pass, such as the economy's recovery losing steam, or if inflation "seemed likely" to stay below 2% in the medium term.
That sentiment was a switch from the minutes of the Jan. 24-25 meeting when the FOMC said: "A few members observed that, in their judgment, current and prospective economic conditions--including elevated unemployment and inflation at or below the Committee's objective-- could warrant the initiation of additional securities purchases before long."
The minutes also said that recent employment data was encouraging, but that the risk of slowing improvements left open the possibility of a decrease in employment numbers.
Members in general anticipated that the bump in oil and gas prices would push up inflation temporarily, which was in line with the minutes from the last minutes.
-- Written by Joe Deaux in New York.
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