July 13, 2011

WASHINGTON (AFP) – The Federal Reserve has set a gradual exit from crisis support of the US economy that could take up to five years, according to the minutes of its last policy meeting released Tuesday.

But with the economy still sluggish, the central bank’s policy board remained divided on whether the country would need a new “QE3” stimulus program, the minutes showed.

Policymakers at the June 21-22 meeting of the Federal Open Market Committee, agreed that the Fed, “when economic conditions warrant,” would begin to raise ultra-low interest rates and then slowly sell off billions of dollars in Treasury securities, originally bought up to inject liquidity into the economy, “over a period of three to five years,” Participants said the measured pace of asset sales was aimed at minimizing the impact of the wind-down on credit conditions “across sectors of the economy.”

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