The Federal Reserve debated changing its plans for raising interest rates so that it could keep its easy-money policy in place longer, The Washington Post reported yesterday. The minutes of the Fed’s policy-setting meeting in July, which were released on Wednesday, show that officials discussed whether they should alter the terms of their landmark promise to keep short-term rates near zero at least until inflation reaches 2.5 percent or the unemployment rate hits 6.5 percent. The ideas broached included lowering the target for unemployment and establishing a floor for inflation. The Fed also considered providing more detail about what it would do once its existing thresholds are met. Although the central bank ultimately decided not to make any policy changes during the meeting, the discussion underscores the challenges facing the Fed as it grapples with the best way to wind down its unprecedented stimulus of the nation’s economy.
