The Federal Reserve is losing patience with the pace of an increasingly fragile economic recovery, according to the minutes of the Fed's most recent policy meeting.
Many members of the Federal Reserve say additional monetary policy accommodation is likely warranted unless the economy improves substantial.
This may open the door for a highly debated third round of quantitative easing measure.
"The information reviewed at the July 31-August 1 meeting indicated that economic activity increased at a slower pace in the second quarter than earlier in the year and that labor market conditions had improved little in recent months," the Federal Open Market Committee noted.
In their assessment of the U.S. economy, policymakers expressed concerns that manufacturing production slowed significantly in the second quarter following a large gain in the first quarter.
Consumer spending increased at a slower rate than earlier in the year, and although the housing market has improved a bit, the Fed seems prepared to jump-start the economy with additional asset purchases.
Earlier this year the Fed embarked on Operation Twist -- buying longer-term Treasuries and simultaneously selling some of the shorter-dated issues -- in an effort keep real interest rates as close to zero as possible.
by RTT Staff Writer
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