Bloomberg Fed Officials Said Recovery Insufficient to Alter QE2

Federal Reserve policy makers said that improvements in the economy didn’t meet the threshold for scaling back their plans to purchase $600 billion in bonds.

“While the economic outlook was seen as improving, members generally felt that the change in the outlook was not sufficient to warrant any adjustments to the asset-purchase program, and some noted that more time was needed to accumulate information on the economy before considering any adjustment,” the Fed said in minutes of its Dec. 14 policy meeting, released today in Washington.

The minutes show that with growth picking up since the easing program began, Fed officials remain focused on an inflation rate that is lower than the roughly 2 percent that the central bank prefers and an unemployment rate that will fall slowly, averaging 9.4 percent this year according to a Bloomberg survey.

“There’s very little chance that they’re going to cut the program short, short of an absolute shocker on economic” data, said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “The bottom line is they only expect slow progress toward their goals.”   more ...