Fed Chairman Ben BernankePAUL J. RICHARDS/AFP / Getty Images
If stocks were meandering on Tuesday before the release of the minutes from the last Federal Reserve meeting, the release of those minutes hasn't given major indexes much direction. In late afternoon trading, the S&P 500 was unchanged and Canada's S&P/TSX composite index was up all of 5 points.
According to the minutes, the Fed believes the U.S. economy is unlikely to slide back into recession. However, another round of stimulus - likely through the purchase of assets, to hold down borrowing costs - would be needed if economic growth is too weak to drive down the unemployment rate or send inflation higher.
On Friday, the U.S. Labor Department reported that September non-farm payrolls shrank by 95,000, which was far worse than expected. Private-sector payrolls grew by 64,000, but that was also below expectations. Meanwhile, the unemployment rate was stuck at 9.6 per cent.
"These minutes highlight that policy makers remain worried about growth outlook and what this period of slower growth means for both the inflation and labour markets going forward," Dawn Desjardins, assistant chief economist at Royal Bank of Canada,said in a note.
"The main point of interest for markets was the discussion of which approach to take if an additional round of quantitative easing was required. The minutes discussed additional purchases of longer-term Treasuries although there was no firm announcement about the details of how QE2 would be implemented or the factors that would be used to guide its course."