FOMC Minutes Show Call for Further Easing; Worry Over ‘What the Next Shoe To Drop Will Be’

The Federal Open Market Committee (FOMC) released the minutes of its July 28-29 meeting, which underscored the Fed’s commitment to keeping the monetary floodgates open to bail out the bankrupt financial system. The minutes state in banker-ese: “Noting the increase in uncertainty about the economic outlook over the inter-meeting period, several participants suggested that additional accommodation could be required to promote economic recovery and return inflation to the Committee’s 2% objective.” In Fedspeak, “additional accommodation” means pumping in even more worthless liquidity to keep the banks afloat. Richmond Fed President Thomas Barkin put it this way, in comments to the press after the minutes were published: “We are at a very vulnerable spot, and I don’t know what the next shoe to drop will be.”