FOMC members were split on balancing the potential need for more monetary stimulus against inflation fears, with most members viewing current inflation levels as temporary and driven by energy prices. The minutes sum up the debate on additional easing:
On the one hand, a few members noted that, depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps to begin removing policy accommodation sooner than currently anticipated.
The minutes do not discuss the Fed members’ views, if any, on Paul Krugman’s calls for additional fiscal stimulus and/or magic.
Fed Officials Divided on Further Stimulus [Bloomberg]