WASHINGTON — A growing number of Federal Reserve officials have concluded that the central bank needs to expand its stimulus campaign unless the nation’s economy soon shows signs of improvement, including job growth.
The question is expected to dominate the agenda when the Fed’s policymaking committee meets next week, with some members pushing for immediate action while others seek to postpone a decision at least until the committee’s next meeting in September so they can see a few more weeks of economic data.
Fed chairman Ben S. Bernanke told Congress last week that the options under consideration include a new round of asset purchases, or ‘‘quantitative easing,’’ often described as QE3. As part of any such program, officials increasingly favor expanding the Fed’s holdings of mortgage-backed securities for the first time since 2010.
Bernanke and other Fed officials are convinced that such a step would further drive down long-term interest rates and improve economic growth, but they are concerned that the benefits would be modest while the costs are uncertain.
The Fed also could take the more modest step of extending its forecast that short-term interest rates will remain near zero beyond late 2014, although many economists regard such a step as unlikely to provide a significant jolt to growth.
Officials are increasingly convinced that the economy has lost momentum after strong growth earlier in the year.
The unemployment rate fell by a full percentage point to 8.1 percent between September and April, but it has since made no further progress. Fed officials predicted in June that if they did not take further action, the rate would remain at or above 8 percent for the rest of the year.
Bernanke has said repeatedly that the Fed would act if it concluded that the economy would not grow fast enough to reduce the rate of unemployment.
“We are very committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment,’’ he told Congress last week.
That cautious phrase holds the key to understanding the pending decision. Current economic conditions likely would warrant a cut in the Fed’s benchmark interest rate.
But of course the Fed cannot cut that rate, which has hovered near zero since late 2008. Instead it must decide whether to bolster the economy by other means, like asset purchases, that have less certain benefits and costs.
The Fed’s Open Market Committee, its top policy panel, is scheduled to meet for two days beginning next Tuesday.