U.S. Fed sees further stimulus maybe needed

08:39, July 15, 2010      

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The Federal Reserve saw the U.S. economic recovery was proceeding at a "moderate pace," but further monetary stimulus may be needed if the economy shows more serious signs of slowing, according to minutes of the latest central bank meeting released on Wednesday.

Top officials of the Fed said that they continued to anticipate a moderate recovery in economic activity through 2011, supported by accommodative monetary policy.

With risks now growing, Fed officials at their June 22-23 meeting saw the need to explore new options for bolstering the economy. That's a turnaround from earlier this year when they were moving to wind down crisis-era supports.

According to the Federal Open Market Committee (FOMC), the central bank's policy making group which meets eight times a year to set interest rates, the Fed was considering whether to implement further policy stimulus if the outlook were to worsen appreciably.

Fed officials projected economic growth in 2010 will reach 3.0 to 3.5 percent, lower than in April when the Fed presented a relatively stronger forecast, saying the economy can grow between 3.2 percent and 3.7 percent this year.

The new document showed that Fed officials saw the "economic outlook had softened somewhat." One-half of Fed officials saw " risks to growth as having moved to the downside."

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