WASHINGTON — Federal Reserve officials agreed at a meeting in June that unemployment would remain elevated for another five to six years, but most did not regard that as reason enough for the Fed to expand its efforts to stimulate growth, according to an official account published Wednesday.
The US economy is stuck in a new kind of normal, somewhere between crisis and prosperity, and economic policy makers are struggling to define their role. The Fed, which has responded forcefully each time the economy tips back toward recession, remains divided over whether it should try with similar urgency to return the economy to prosperity.
The account of the June meeting suggested that Fed officials now viewed the risk of standing still, so clear in a crisis, as smaller and harder to measure, while the uncertain consequences of action are weighing heavily on their willingness to expand the central bank’s aid campaign.
‘‘A few’’ of the 12 officials who vote on Fed policy thought further measures, like bond purchases, ‘‘likely would be necessary to promote satisfactory growth,’’ the account said. But several other officials were willing to consider such steps if economic conditions deteriorated. This was more than the Fed said after its last meeting in April but less than many investors were hoping to hear.
The Fed expected slow growth this year, but the account — released after a standard three-week delay — said officials were still disappointed that ‘‘a variety of indicators showed smaller gains than had been anticipated’’ in recent months.
Among the drags on the economy cited in the document were ‘‘slow growth or even contraction in some major foreign economies, ongoing and prospective fiscal tightening in the United States, modest growth in household income, and — despite some recent signs of improvement — continued weakness in the housing sector.’’ The Fed announced after the meeting on June 19-20 that it would continue until year’s end with an effort to reduce borrowing costs for businesses and consumers by rearranging its portfolio. The expected impact is modest, however. The account said it would put ‘‘some downward pressure on longer-term interest rates and help make broader financial conditions more accommodative.’’
The document, a summary rather than a transcript, offered little clarity about the Fed’s next steps, a point underscored by the diversity of conclusions that analysts who follow the central bank quickly drew from the text. Some saw clear evidence that action was imminent; others drew the opposite lesson.
Paul Ashworth, chief US economist at Capital Economics, was among the analysts who chose a position in the middle, writing to clients that ‘‘officials are edging closer to launching a third round of large-scale asset purchases, but it won’t become a reality unless the recovery loses even more momentum.’’