NEW YORK ( TheStreet) -- Support for further accommodation was growing at the last meeting of the Federal Reserve's open market committee, according to minutes of the July 31-Aug. 1 get-together released Wednesday afternoon.
"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," the minutes read. "Several members noted the benefits of accumulating further information that could help clarify the contours of the outlook for economic activity and inflation as well as the need for further policy action."
As for what form additional "accommodation" might take, there were decidedly more voices in favor of a large-scale asset purchase program than against.
"Many participants expected that such a program could provide additional support for the economic recovery both by putting downward pressure on longer-term interest rates and by contributing to easier financial conditions more broadly," the minutes indicate. "In addition, some participants noted that a new program might boost business and consumer confidence and reinforce the Committee's commitment to making sustained progress toward its mandated objectives."A number of committee members also expressed support to extend the Fed's forward guidance on keeping interest rates at historic lows, but they ultimately decidedly it made the most sense to defer a decision on the matter until the September meeting. "They agreed to defer a decision on this matter until the September meeting in order to consider such an adjustment in the context of updates to participants' individual economic projections and the Committee's further consideration of its policy options," the report said. All central bankers, except for Richmond Federal Reserve president Jeffrey Lacker voted in favor of the action. The report said Lacker felt there is significant uncertainty regarding changes in economic conditions in the coming years, which would make it difficult to forecast the path of interest rates. Stocks have reacted positively in the wake of the release of the minutes with the Dow Jone Industrial Average paring its losses, the S&P 500 recovering to trade flat, and the Nasdaq Composite going positive. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux