Members considered that the decision to buy $40 billion of mortgage-backed securities each month as effective in lowering long-term interest rates, and in turn helping to support spending and a recovering housing market.
As members agreed that their overall assessments of the economic outlook were little change, "all but one member judged that maintaining the current, highly accommodative stance of monetary policy was warranted in order to foster a stronger economic recovery in a context of price stability".
Regarding whether the Federal Reserve would extend the Operation Twist which is due to expire in December, minutes stated: "Looking ahead, a number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity extension program in order to achieve a substantial improvement in the labor market".
The minutes also showed continued interest with a new approach to the Fed's communications policy, as "many" members favored the use of economic variables in their guidance, though "a number" favored qualitative triggers. However, the minutes indicated that the Fed would need to resolve a number of practical issues before deciding whether to adopt quantitative thresholds to communicate its thinking about the timing of the initial increase in the federal funds rate.
At the moment, the Fed is relying on a calendar date, saying it expects to keep rates near zero until mid-2015.
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