Washington - Spa
U.S. Federal Reserve (Fed) policymakers debated the possibility of additional purchases of Treasury bonds to try to spark a stumbling U.S. economy at their last meeting on August 9, according to notes from the meeting released Tuesday. On the consideration of a third round of asset purchases-known as quantitative easing, or QE3-the Fed said some members argued that such purchases would drive down interest rates further and was the proper response to the growing signs of economic weakness. “A few members felt that recent economic developments justified a more substantial move at this meeting,” the notes said. The central bankers also discussed other options, including selling short-term Treasury securities and using the proceeds to buy long-term debt to lower interest rates, or cutting the interest rate the Fed pays on excess reserve balances to encourage banks to lend the money rather than to leave the cash idle at the Fed, the notes said.