Fed meeting minutes show apprehension of economic downturn

Most Federal Reserve policymakers agreed at a meeting last month that they might need to take further action to support growth if the U.S. economy loses momentum. Minutes of that meeting, released today, confirm that Fed officials signaled concern that the struggling U.S. economy could worsen if Congress fails to avert tax hikes and across-the-board spending cuts that kick in at the end of the year. They also expressed worries that Europe’s debt crisis will weigh on U.S. growth. Members predicted the economy should continue to grow moderately, but the Fed lowered its growth forecast at the meeting after seeing reports of slowed consumer spending and a weakened U.S. job market. Chairman Ben Bernanke could offer some indication of the Fed’s plans next week when he delivers the central bank’s updated economic assessment to Congress. Bernanke told reporters after the June meeting that he was open to another round of bond purchases if the job market does not improve. Bloomberg has posted the complete minutes here.