Restructuring of the Federal Reserve its latest stimulus program on the purchase of mortgage bonds after members agreed to help the nascent housing recovery was a good way to lift the broader economy.
Meeting Minutes Fed September 12-13 published on Thursday also shows that most of the members now agree that linking an increase in interest rates in the short-term future economic measures, such as the unemployment rate specific, can be effective. But members agreed to hold off on the change to work on the details.
After the meeting, the Fed said it will keep buying mortgage bonds until the labor market showed a significant improvement. Fed also extended its plan to keep the benchmark interest rate on short-term interest near zero until 2015 and mid-left open the possibility of taking further steps.
The Fed bought already more than $ 2 trillion in bonds since the financial crisis of 2008. The latest program seeks to spend $ 40 billion a month to buy mortgage securities without the end of the deadline.
Many participants agreed at the meeting that more purchases of bonds that would provide support to the economy through downward pressure on long-term interest rates. To encourage more borrowing and spending, which drives growth.
According to the minutes, members of the Fed compared the effectiveness of buying Treasuries to mortgage-backed securities.
"Some participants suggested that all things being equal, (mortgage bonds) purchases could be better because it is more directly support the housing sector, which is still weak, but showed some signs of improvement in recent times," according to the minutes.
The few members uncertainties buy additional bonds would help. And raised fears that buying more bonds could increase the risk of higher inflation later.
And mortgage rates were less than 4 percent throughout the year. While rising home sales, they remain much lower than healthy levels.
On Monday, he defended Chairman Ben Bernanke aggressive policies during a speech to the Economic Club of Indiana. Bernanke said the Federal Reserve needs to cut borrowing rates in the long term, because the economy is not growing fast enough to reduce the high rates of unemployment.
He also sought to reassure investors about the timetable for the Fed to save them in the short term rate is very low. He said the plan does not mean that the Fed is expected to be weak economy until 2015, indicating that policy makers plan to keep rates low well after the economy strengthens
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