WASHINGTON (AP) — Newly released transcripts show Federal Reserve officials were sharply divided in 2011 over whether the central bank should launch a new program aimed at pushing long-term interest rates lower to spur economic growth.
The transcripts released Thursday show that some officials worried the effort could lead to inflation risks. Others argued that the bigger danger was that the country could topple into a new recession.
The central bank ended up adopting the program, dubbed "Operation Twist," at its September 2011 meeting by a 7-3 vote after what the transcripts showed was a lengthy and at times contentious debate. Under the program, the Fed sold $400 billion in short-term U.S. government debt and used the money to buy longer-term debt as a way to lower long-term rates and spark economic growth.