Fed Leaning Toward More Economic Stimulus

Washington, DC, Oct. 13, 2010--The Federal Reserve is strongly considering another round of stimulus to boost the economy, according to minutes from its September 21 meeting.

The Fed indicated it is considering buying more Treasury bonds to drive down loan rates, and signaling an openness to higher prices later to encourage more spending now.

Economists predict Fed officials will approve the bond purchase program at their November 2-3 meeting.

Fed policymakers also spoke at their last meeting about setting a higher inflation target, hoping that would get people to spend more money in short run.

The minutes showed the Fed was concerned that the economy was growing slower than they had expected. While Fed officials didn't see the economy slipping back into a recession, they worried it had become vulnerable to "potential negative shocks." They expressed concerns that unemployment, which has been at 9.6% for the past months, would stay elevated.

The Fed's purchase aims to drive down interest rates on mortgages, corporate debt and other loans. It hopes that this will spur Americans to boost spending, which would strengthen the economy and ultimately chip away at the stubbornly high unemployment rate.