Federal Reserve Hasn’t Ruled Out QE3

According to the minutes from the Federal Reserve’s two-day September policy meeting, released Wednesday, the central bank has not yet ruled out a third round of asset purchasing, or quantitative easing. At the conclusion of that meeting, held September 21st and 22nd, Fed officials unveiled “Operation Twist,” a plan to sell short-term Treasuries and but more longer-term debt, in an effort to drive down interest rates without pumping more capital into the economy.

According to the minutes released Wednesday, however, the Fed has left the door open for QE3. “A number of participants saw large-scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted,” the minutes read.

Three of the central bank’s policy makers were in opposition to further economic stimulus at the time of the meeting, while two thought it would be warranted, but reluctantly agreed to Operation Twist because it didn’t preclude stimulus measures from taking place in the future. The Fed’s next policy meeting is scheduled for November 1st and 2nd.