Fed uneasy about its forecast of pickup: minutes

WASHINGTON (MarketWatch) - Federal Reserve officials were very uneasy about their forecast of a gradual pickup in economic growth over coming quarters, according to the minutes of the central bank's interest-rate setting committee meeting on Sept. 20-21 released Wednesday. Fed members saw "significant downside risks" to growth. These risks included household deleveraging, bigger-than-expected fiscal tightening, or a potential spillover from Europe. Fed officials agreed to consider how best to use their monetary policy and liquidity tools to deal with such shocks if they occurred. At the meeting, the Fed adopted an Operation Twist to extend the maturities on its balance sheet. Two officials wanted to do more. Fed officials seemed eager to disclose more about their economic goals, suggesting there could be more developments on this front in coming meetings.

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