Fed Faces Internal Divisions

October 17 00:00 2011

New York, October 17 (RainbowNewsLine.com) – The US Federal Reserve has been facing a lot of internal division regarding the policies that it has been releasing of late. According to reports, the latest policy which Fed passed at the end of September to reduce long term rates was passed after severe debates at the end of a two day meeting. The vote count was 7 members for it and 3 against it.

What is more surprising is the fact that amongst the 7 members that were for the proposal, 2 were reportedly upset about the fact that the decision was being structured the way it was. They wanted the interest rates to be lowered even further. However, given the way the votes were structured, they voted in favor of the proposal. This reveals that there was actually no consensus at all in the Federal Open Market Committee (FOMC).

The Fed has been taking a lot of controversial decisions in the past. Amongst them was the decision to keep the interest rate permanently low for two years and permanently announce the intention to do so. Also the $400 billion Operation Twist has found its share of critics. The American central bank therefore is facing issues on the inside as well as the outside.