Fed Minutes Show FOMC Divided on QE3

The latest Fed minutes showed a growing divide among hawkish and dovish members over the prospects for a third round of quantitative easing (QE3).
One of the key sections of the Fed minutes – a recap of the most recent Federal Open Market Committee (FOMC) meeting – indicated that:

A few members observed that, in their judgment, current and prospective economic conditions–including elevated unemployment and inflation at or below the Committee’s objective–could warrant the initiation of additional securities purchases before long. Other members indicated that such policy action could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run. In contrast, one member judged that maintaining the current degree of policy accommodation beyond the near term would likely be inappropriate; that member anticipated that a preemptive tightening of monetary policy would be necessary before the end of 2014 to keep inflation close to 2 percent.