Officials at the US Federal Reserve are considering a fresh monetary stimulus that would combine guidance on the provisional scale of a new programme and a time frame for buying assets with the flexibility to adjust its size at regular meetings.
Although no decision has been made to launch a new round of quantitative easing, Fed officials are weighing an approach that allows more discretionary meeting-by-meeting decisions than the unconditional “shock and awe” stimulus it launched during the depths of the crisis in 2008 and 2009.
The US central bank is considering a return to buying assets because unemployment remains stubbornly high at 9.6 per cent and core inflation of about 1 per cent is below the Fed’s goal of about 2 per cent.