Get ready for another round of fiat money production courtesy of the Federal Reserve; the central bank says if economic data doesn’t turn around, it will fire up the presses “fairly soon.”
Recently released minutes from meetings of the Federal Open Market Committee indicate that Fed officials have concerns about slow growth and the state of European economic affairs.
The stimulus is not set in stone, but most analysts contend that it would not be unlikely for Americans to see a third round of quantitative easing (money printing) announced at the Fed meeting in September.
“Many members judged that additional 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 minutes of the July 31-Aug. 1 FOMC meeting said.
Fed policymakers also cited conditions that “warrant exceptionally low levels for the federal funds rate at least through late 2014” as a reason to possibly extend the duration the main interest rate will remain near zero, the minutes show.
There has been widespread speculation that the Fed will act in the months prior to the Presidential election in order to create a temporary economic boom that would aid President Barack Obama in re-election. This is despite Fed Chairman Ben Bernanke’s assertion that the Federal Reserve makes no decisions based on political considerations.
Liberal economist Paul Krugman lambasted conservative pressure on the Fed earlier this month in a post on a New York Times blog, writing: “It really makes no sense — except in terms of politics. I really believe that we have reached a point where the Fed is afraid to do its job, for fear of being accused of helping Obama.”