The FOMC minutes for the July/August meeting revealed that support for a new round of quantitative easing in the short-run is rising within the ranks of the Fed. While Bernanke & Co. managed to keep their policy powder untapped last time around,they see three factors still posing major downside risks: the sovereign debt crisis in Europe, a global economic slowdown led by China and other BRICs, and the fiscal cliff, which could result in substantial fiscal contraction and, as the CBO noted on Wednesday, a recession in the U.S.
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