Fed officials warn of looming crisis for economy, discuss steps to boost growth

WASHINGTON – Federal Reserve policymakers agreed last month that they might need to take more action to support growth if the U.S. economy loses momentum.

Minutes of their June meeting show Fed officials signalled their concern that the struggling U.S. economy could worsen if Congress fails to avert tax hikes and across-the-board spending cuts that kick in at the end of the year.

Some members noted that defence contractors are already laying plans for layoffs if that happens. Members warned that tighter government spending could slow the economy well into next year.

At the meeting, the Fed extended a program that shifts its bond portfolio to try to lower long-term interest rates. Policymakers left open the possibility of providing further help, such as launching a new program of bond purchases.