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Fed Meeting: Look, if Things Don’t Improve, We’re Going to Need More Stimulus

Fed Has Serious Discussion About More Stimulus to Boost US Economy

Federal Reserve Chairman Ben Bernanke testifies Feb. 29 before the House Financial Services Committee (J. Scott Applewhite/AP)

WASHINGTON (TheBlaze/AP) — Federal Reserve officials spoke with increased urgency at their last meeting about the need to provide another round of monetary easing to “boost” the U.S. economy.

Many members felt further support would be needed “fairly soon” unless the economy improved significantly, the minutes of the July 31-Aug. 1 meeting show. The minutes didn’t say what steps might be taken. The boldest move would be to launch a new program of bond buying to try to lower long-term interest rates to encourage more borrowing and spending.

“[A]dditional 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 said in minutes to its July 31-August 1 meeting.

The minutes show many officials favored pushing the timetable for any increase in record-low short-term rates beyond the Fed’s current plan of at least late 2014. Many economists think the target will be extended to mid-2015. This language might be altered at the September meeting, the minutes indicate.

Early reaction in the stock market was positive but muted. The Dow Jones industrial average rose modestly. It was down about 70 points at 2 p.m. Eastern time, when the Fed minutes were released, and down 30 points several minutes later. The yield on the benchmark 10-year U.S. Treasury note dipped slightly, to 1.74 percent from 1.75 percent earlier.

The price of gold, which traders sometimes buy as a hedge against inflation, jumped about $10 an ounce, to $1,650, its highest point since early May.

The minutes released Wednesday cover the July 31-Aug. 1 policy meeting. The Fed releases the minutes of its private discussions three weeks after each meeting. The policy committee will meet next Sept. 12-13.

After its August meeting, the Fed announced no changes to policy. But in a statement afterward, it appeared to signal a growing willingness to take further steps to boost the economy if it doesn’t improve. The Fed noted that growth had slowed in the first half of the year. In particular, it pointed to lackluster job growth and consumer spending.

The issue of whether the Fed will actually change policy in a major way in September has been thrown into doubt by recent economic indicators showing a bit more strength in such areas as hiring and consumer spending.

Many analysts are looking to a speech by Federal Reserve Chairman Ben Bernanke at an annual Fed conference in Jackson Hole, Wyo., to possibly provide more guidance on the Fed’s next moves.

Follow Becket Adams (@BecketAdams) on Twitter

Comments (92)

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  • OperationNorthwoods
    Posted on August 22, 2012 at 8:12pm

    Sure glad we didn’t elect that kooky guy Ron Paul who has been fighting the FED for 30 years. Don‘t worry Mitt Romney’s excellent hair and polished demeanor will see us through this mess.

    Report Post » OperationNorthwoods  
    • Gold Coin & Economic News
      Posted on August 22, 2012 at 8:32pm

      Let’s just spend ourselves into oblivion, it doesn’t matter at all. What the Fed needs is a basic economics lesson:
      http://www.youtube.com/watch?v=sOKcdOI25ig

      Report Post » Gold Coin & Economic News  
    • lukerw
      Posted on August 22, 2012 at 8:34pm

      To me St Paul had it all wrong, and reversed, when he said… we are not fighting people but Principalities (Institutions)! To me… Socialists make Institutions into Evil!

      Report Post » lukerw  
    • SCREW-WINDOWS
      Posted on August 22, 2012 at 8:43pm

      Hey Bernanke if this was your bank account what would you do ?

      Report Post » SCREW-WINDOWS  
    • jwt
      Posted on August 22, 2012 at 9:18pm

      who said the Fed reserve is pro US?

      Report Post »  
    • Sirfoldallot
      Posted on August 22, 2012 at 10:00pm

      Our best hope @ this point. R the press’s still runing still from the last stimulas ?

      Report Post » Sirfoldallot  
    • happygranny
      Posted on August 23, 2012 at 12:37am

      What part of “we don’t have any money” don’t these idiots not understand???? Get rid of half of the stupid government regulations, cut federal salaries, go to the Fair Tax and you won’t be needing any more stimulus spending. They need to destroy the printing machines!!!!

      Report Post »  
    • JRook
      Posted on August 23, 2012 at 9:23am

      This is the story, “The issue of whether the Fed will actually change policy in a major way in September has been thrown into doubt by recent economic indicators showing a bit more strength in such areas as hiring and consumer spending.” Despite Beckett’s attempt to put as negative a spin on the Truth as possible.

      Report Post »  
    • poorrichard09
      Posted on August 23, 2012 at 10:05am

      The central banks of the world are like a man in a row boat that has an 8 inch diameter hole in the bottom-they are bailing for all their worth just to keep the boat (global economy) afloat. It‘s a fool’s errand.

      Report Post »  
  • shorthanded12
    Posted on August 22, 2012 at 8:00pm

    Its The “Benny ”Hill“ Bernanke Show” 2.0.
    You mean the shadow government like Goldman Sachs, BOA, AIG, Fannie and Freddie need to shore up there cash reserves before the shlt hits the fan in the Middle East and Europe falls off the cliff.
    Alan Greenspan, Ben Bernanke, Timmy Tax Cheat, Hank Paulson…..Expert Book COOKERS. I heard the MOB is looking for a few good book keepers. LOL

    Report Post »  
    • klatoo
      Posted on August 22, 2012 at 9:04pm

      Yes it’s a rip off. But if you had a head on your shoulders and put your money were your mouth is you’d have been invested in dividend stocks the last 3 years. The moderates in DC knew it. You read the blaze so you should have known it too. Those days are sadly coming to an end. By the time most people figure it out stocks will go down and something else will go up. I plan to be on that trip.
      0bama and moderates in DC know how to transfer your wealth. It’s a thing of beauty.
      Hey maybe you should be afraid of Iran?
      (I’ll take more please.)

      Report Post »  
  • soybomb315_II
    Posted on August 22, 2012 at 7:46pm

    Doesnt it make you all warm and fuzzy inside knowing that there are unconstitutional and anti-freedom agencies like the FED playing politics with the economic future of America? Or is the FED only wrong when a democrat is in office?

    Report Post » soybomb315_II  
    • lukerw
      Posted on August 23, 2012 at 3:36am

      Institutions can be Relocated and Restructured… but they only consist of PEOPLE! It is the People whom you place in Institutions… whom make them Good or Evil! The “FED” is not the Real Problem… is it?

      Report Post » lukerw  
    • soybomb315_II
      Posted on August 23, 2012 at 7:32am

      no. the Federal Reserve is a system that was founded on progressive ideas and secrecy. If you believe that absolute power corrupts absoluetely – then it doesnt matter WHO we put in there, they will become corrupted.

      Report Post » soybomb315_II  
  • progressiveslayer
    Posted on August 22, 2012 at 7:45pm

    Instead of printing more funny money here’s a stimulus plan that will work,reduce the size of local state and federal government by 70-80%,eliminate IRS,DOE,Dept.of education,DHS,TSA,SEC,HUD,and I‘m sure there’s many more.Exploit all our natural resources and kill all so called green energy BS programs,repeal the so called Obama care BS law and deport 20 million illegals,hint they’re here illegally.And secure our borders you pigs.

    Report Post » progressiveslayer  
    • LakeHartwellSailor
      Posted on August 22, 2012 at 8:20pm

      Spot on slayer. Another round of stimulus? Maybe LaHood can “create” another 65000 jobs at $740,000 per job. Brilliant! Yep, I’m with you we have to cut all forms of government drastically.

      Report Post » LakeHartwellSailor  
    • SCREW-WINDOWS
      Posted on August 22, 2012 at 8:28pm

      The best stimulus we could have right now is Obama’s resignation.

      Report Post » SCREW-WINDOWS  
    • Kelly21
      Posted on August 22, 2012 at 9:52pm

      Now,THAT is a workable, viable plan!

      Report Post » Kelly21  
    • Chuck Stein
      Posted on August 22, 2012 at 10:47pm

      @ Progressiveslayer: another way to stimulate the economy without spending money would be a deregulation stimulus.

      Report Post »  
  • lukerw
    Posted on August 22, 2012 at 7:36pm

    I propose… Lock & Load… as a Stimulus!

    Report Post » lukerw  
  • Ben__Franklin
    Posted on August 22, 2012 at 7:35pm

    Waaaaiiiitt a second, Didn’t Odumbo just say in a speech last week that his polices are working? Why to we need more STIMULUS Berry? Do we need more to keep the unemployment rate below 15%? Do we need more so “it could have been worse”? Whats up Berry besides unemployment, gas, and food prices because the only thing down is your job approval rating.

    Report Post »  
    • Walkabout
      Posted on August 22, 2012 at 7:55pm

      Unless it is really big most people only remember political event of the last 2 weeks. Anything before that can be lied about or spun.

      Report Post »  
    • Bluebonnet
      Posted on August 22, 2012 at 8:11pm

      Pizz on the stimulus, it doesn’t work.

      Report Post »  
  • blkbelt7
    Posted on August 22, 2012 at 7:33pm

    THESE ARE THE TYPE OF PEOPLE WE NEED TO REPLACE…they are WRECKNG this nation…ABO/OMG

    Report Post »  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:37pm

      Replace? These are the people you’re trying to vote in! (assuming you’re a Romney voter)

      Report Post » Rothbardian_in_the_Cleve  
    • Walkabout
      Posted on August 22, 2012 at 8:02pm

      Rothbardian_in_the_Cleve
      Are you making the GTH slow versus fast argument or are you seriously saying there is no difference?

      Report Post »  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 8:09pm

      Hmmm, I think I‘m saying there’s no difference. Gulp.

      Report Post » Rothbardian_in_the_Cleve  
  • RJJinGadsden
    Posted on August 22, 2012 at 7:33pm

    Stimulus my ass, 0bama has more voters to buy.

    Report Post » RJJinGadsden  
  • Walkabout
    Posted on August 22, 2012 at 7:30pm

    “Many members felt further support would be needed “fairly soon” unless the economy improved significantly, the minutes of the July 31-Aug. 1 meeting show”

    B.S.!

    Got to Zerohedge.com look at the economic sugar highs after each stimulus. Each high was shorter than the previous one. Actually it is the same cycle you see in drug abuse.

    Report Post »  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:34pm

      Zerohedge is a great site. Their shadow banking work is amazing.

      Report Post » Rothbardian_in_the_Cleve  
    • Walkabout
      Posted on August 22, 2012 at 7:48pm

      It was a plot of the stock market vs time showing the effects of QE1, QE2, Operation Twist.

      After each one the stock market went up & then fell. the stock market is not real. It is all finagled by central bank interventions. There is no price discovery my the market of stocks.

      When some piece of eye candy or empty suit on a network says look at the market they are cheer leading. The market is rigged right now. Obama is a failure unless he has a Cloward & Piven strategy.

      Report Post »  
  • Walkabout
    Posted on August 22, 2012 at 7:28pm

    Is is very easy. It is all about HOPE. There is none.

    Obama effectively said work all you want I will just steal it. An oppressive tax rate while technically legal is theft.

    Zerohedge covered this last week. The key missing ingredient is a message of hope like “Morning in America” versus the Cater misery index.

    The fewer interventions in the economy thru CRA or anything else the better.

    All they need to do is make some cuts to the budget resembles the one in 2006 & increase it after that for inflation.

    Report Post »  
  • COFemale
    Posted on August 22, 2012 at 7:21pm

    yeah, that makes total sense; throw good money at the problem. Why do Democrats believe using money will solve the problem? They are FN idiots. Even Dr. Phil will tell you, “you can’t solve money problems with money”. In other words, you don’t take out another loan to pay off a credit card bill.

    Can we just ban all Democrats from holding any position dealing with money? They have not one lick of sense, as my dad would say.

    Report Post » COFemale  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:36pm

      Don’t want to burst your bubble, but Romney supported(s) this effort and Ryan voted for similar measures (stimulus and TARP) multiple times.

      Probably doesn’t matter though, right?

      Report Post » Rothbardian_in_the_Cleve  
  • progressiveslayer
    Posted on August 22, 2012 at 7:20pm

    Helicopter Ben will print more funny money in a vain attempt to forestall the inevitable collapse of our economy.The government worshipers won’t know what hit em,it’s coming people,as sure as Barry is a Marxist maggot rotten MFf%$#&*(*^&%^% POS.

    Report Post » progressiveslayer  
    • 702TruthSeeker
      Posted on August 22, 2012 at 11:26pm

      http://goldprice.org/charts/history/gold_30_year_o_usd.png?0.7259935018792847

      i just can’t get over the 30 year graph

      .. but sir, it’s already on fire!! how would pouring more gas on it help the situation?
      .. well, it’s complicated, you see.. there are many factors to consider here and many possible solutions. if you pour enough gas on it, it will eventually drown out the flames… besides, what if someone gets thirsty?

      Report Post »  
    • progressiveslayer
      Posted on August 23, 2012 at 8:31am

      And the more the fed devalues our currency the higher gold will go,eventually the dollar will lose reserve currency status,when that happens we are F&%$&D.

      Report Post » progressiveslayer  
  • Nanaswords
    Posted on August 22, 2012 at 7:19pm

    NO More Tarp Monies…WITHOUT a DETAILED BUDGET PLAN and INCLUDING CUTS OVER EVERY DEPT. ……..LINE by LINE……..WITH Salary Cuts on Every Gov. Employee/with MANY JOBS CUT From The Dept Groups !!!!!! Limit of Days Spent In D.C. !!!!!!! No More funds to go to large corporations!!!!! No More funds to any other country…. that has not proven to be of the same Principles as our own nation !!!!!!!! GO Romney/ Ryan Team !!!!!!!!!

    Report Post »  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:34pm

      It’s not TARP or stimulus. It’s quantitative easing. It is done because we are in a liquidity trap, meaning interest rates (real) have no where left to go so the only way we can expand monetary supply and velocity of money is to create money. However, the velocity of money (Keynsian multiplier) is less than one and has been for the longest time. Why? Think defector theory of Nash Equilibrium. When confidence erodes nobody wants to be the last one on the boat. Anyway, they aren’t printing. They are monetizing. They buy bonds with money that they conjured up. It doesn’t exist. They do this in the FOMC and buy from financial institutions. They, of course, are already flush with cash in huge investment portfolios. So the money goes back into the market. They are hoping for the wealth effect. However, because we are in a liquidity trap with negative keynsian multiplier the result is an increase in stocks…sure, but a corresponding increase in commodities and ultimately prices. So your 401K goes up but you can’t spend it. But, your food and energy and durable good prices go up and you have no corresponding increase in real wages to offset them. You are now poorer and the banks and investment firms (who buy candidates) are richer.

      The Romney/Ryan thing is a joke right? You know they are both advocates of all of this right?

      Report Post » Rothbardian_in_the_Cleve  
    • Norm D. Plume
      Posted on August 23, 2012 at 2:35pm

      @Rothbardian:

      Thank you.

      Report Post » Norm D. Plume  
  • IMCHRISTIAN
    Posted on August 22, 2012 at 7:13pm

    Do away with bad regulations and start drilling for one thing. How about Keystone? Do we have to put them in booster seats to teach them how an economy works and what makes it worse. No, they do know how to make it worst.

    Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on August 22, 2012 at 7:12pm

    One more move to destroy the economy by Obama the god-king; the clear and present fact is that they are carrying out the beginning of an economical scorched earth. The Democratic leadership has declared they will see a natioal economical collapse before handing power over to the Republicans; and so we are seeing it begin.

    Failed economic policies of Kenyesian origins, and a plan of scorched earth; more treason on behalf of Obama.

    Report Post » Snowleopard {gallery of cat folks}  
  • 502_eagle
    Posted on August 22, 2012 at 7:08pm

    Didn’t their plan work????

    Report Post » 502_eagle  
  • JUSTANOTHEROPINION
    Posted on August 22, 2012 at 7:07pm

    I find it offensive and wasteful that in todays day and age the Governmental departments travel at our expense to present a speech when it is astronomically cheaper to do it over the internet like private companies do to save money. If they want a vacation then let them use their own money and not mine. This is rediculous.

    Report Post »  
  • 502_eagle
    Posted on August 22, 2012 at 7:04pm

    Come on Ben, fire up the presses, not like printing more more has a down side. Do QE3 QE4 and QE5 all at the same time.

    Report Post » 502_eagle  
  • 2smart4libs
    Posted on August 22, 2012 at 7:03pm

    ie WE need to bribe jug ears donors more.

    Report Post »  
  • RANGER1965
    Posted on August 22, 2012 at 7:03pm

    “encourage more borrowing”

    uh…whose lending?

    Report Post » RANGER1965  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:43pm

      I worked for a bank a while back. When the crash happened we repriced the commercial portfolio as well as calling notes and cutting off numerous companies. It was bloody. Then in the years to come, management was shocked when market survey kept popping up the term “We’re going to be our own bank”. Medium and small business basically gave the middle finger to banks after the way they were treated. They deleveraged and are now self funding. The banks will lend commercial (drives 60% of profits) but there is no demand. Ben wants it like it was. Small and Medium business no longer trust him or the OCC or White House or Congress. They circled the wagon and are in survival mode. NOBODY feels bullish enough to leverage up sans some M&A activity with cash included and short paybacks.

      Report Post » Rothbardian_in_the_Cleve  
    • Walkabout
      Posted on August 22, 2012 at 8:18pm

      Rothbardian_in_the_Cleve

      No that is is news & worth knowing. I knew banks were not lending all that much. But you fleshed out the story some.

      Report Post »  
    • Walkabout
      Posted on August 22, 2012 at 8:18pm

      Correction: “Now” not “No”

      Report Post »  
  • justangry
    Posted on August 22, 2012 at 7:02pm

    Just great. Gas prices are through the roof, thanks to sanctions. Food prices are going to be horrible this year because of the drought. Yet this knucklehead wants to make it worse by making our dollars worth less AGAIN!! I’m so sick of this crap.

    Report Post » justangry  
    • Rothbardian_in_the_Cleve
      Posted on August 22, 2012 at 7:19pm

      Well, at least we know that the election will have no bearing on this decision since Obama and Romney are indistinguishable in their support for said action. Nice to see that Obama can be conservative economically from time to time.

      Report Post » Rothbardian_in_the_Cleve  
    • progressiveslayer
      Posted on August 22, 2012 at 7:27pm

      It’s weird huh a private bank,the fed,runs our monetary policy? In 1922, Henry Ford wrote the following….

      “The people must be helped to think naturally about
      money. They must be told what it is, and what makes it money, and what
      are the possible tricks of the present system which put nations and
      peoples under control of the few.”

      Yes Henry you helped create the beast that will end our economy,thanks bastard.

      Report Post » progressiveslayer  
    • resme
      Posted on August 22, 2012 at 7:54pm

      I always get a chuckle when they say replace the fed chairman. The president selects from a group of individuals that were preselected by the federal reserve.

      Report Post » resme  
  • EqualJustice
    Posted on August 22, 2012 at 7:01pm

    SURE! Because that worked so well the first time? “creating a job” at the cost of 1 million per job is ludicrous! The Grants and Loans being handed out are already destroying us.

    Report Post » EqualJustice  
  • thekuligs
    Posted on August 22, 2012 at 6:57pm

    They know darn well they don’t want to stimulate anything–they just can’t face reality. It’s like opening up another credit card when you are flat broke.

    Report Post » thekuligs  
  • RightUnite
    Posted on August 22, 2012 at 6:56pm

    Ahm… Look… F no!! Got it??

    Report Post »  
  • Smokey_Bojangles
    Posted on August 22, 2012 at 6:45pm

    AUDIT THE FED Harry Reid you POS!

    Report Post » Smokey_Bojangles  
    • mrsuperpat
      Posted on August 22, 2012 at 6:52pm

      And Romney won’t do anything any differently no matter what he says. More free money for the Banks to prop up their phony stock market and derivatives.

      Report Post »  
    • justangry
      Posted on August 22, 2012 at 7:04pm

      @MrSuperPat, You know it. They own his sorry ass. Well they own all of us, but he’s extra indebted to them.

      Report Post » justangry  
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