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US Fed debated economic "triggers"

October 5, 2012

The US Federal Reserve’s minutes from its September policy board meeting revealed general consensus over the need to provide more economic stimulus. By contrast, members show significant disagreement about the details, particularly regarding what economic conditions will trigger a reversal of the policy.

The Fed considered using forward guidance that would include an economic threshold that would need to be crossed before rates would go up, according to the report. “The idea under consideration is to keep offering assurances of low rates, but tie those assurances to what is happening in the economy rather than a point on the calendar.”