Markets Jump After FOMC Comments on Easing

The markets moved higher following the release of the minutes from the last FOMC meeting. Gold futures also moved up, climbing about $10 to $1,648. The minutes showed that many of the Federal Reserve Board members favored continued easing measures if the economy did not show signs of a sustained pickup. “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” the Fed said. The markets will now be focused on Fed Chairman Ben Bernanke's speech at Jackson Hole, Wyoming on August 31, where he signaled that QE2 was forthcoming in 2010. Many of the Fed members said that a new round of quantitative easing "could provide additional support for the economic recovery." The Federal Reserve also debated the relative merits of purchasing more Treasury securities -- to further lower long-term interest rates -- rather than buying mortgage-backed securities. Discussions also took place about potentially changing the Fed language about interest rates, which the central bank has said will stay "exceptionally low" through late 2014. Some members suggested that this language could be extended even further. “It was noted that such an extension might be particularly effective if done in conjunction with a statement indicating that a highly accommodative stance of monetary policy was likely to be maintained even as the recovery progressed,” according to the minutes.