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The minutes released Wednesday cover the discussion that took place at the April meeting. In a statement after that meeting, Fed officials repeated their plan to keep a key short-term interest rate at a record low until at least late 2014. The action was approved on a 9-1 vote. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, opposed retaining the late-2014 target date. The minutes said Lacker believed the Fed will have to start increasing interest rates by mid-2013 in order to keep inflation under control. At a news conference after April's meeting, Chairman Ben Bernanke left open the possibility of further Fed action to stimulate the economy. Private economists generally say another round of Fed bond buying isn't likely unless the economic outlook darkens considerably. Bernanke said at his news conference that more bond purchases, or other steps by the Fed, were still an option if the economy weakens. He declared that "those tools remain very much on the table." Critics have expressed concerns that the central bank was raising the risk of higher inflation with its long-running campaign to keep rates low. The Fed has kept its federal funds rate, the target for overnight bank lending, near zero since December 2008. That means consumer and business loans tied to that rate have also remained at super-low levels. The lower those loan rates, the more likely it is that consumers and companies will borrow and spend to invigorate the economy.
[Associated
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