WASHINGTON – Newly released transcripts show Federal Reserve officials were sharply divided in 2011 over whether the central bank should launch a new program aimed at pushing long-term interest rates lower to spur economic growth.
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The transcripts released Thursday show that some officials worried the effort could lead to inflation risks. Others argued that the bigger danger was that the country could topple into a new recession.
The central bank ended up adopting the program, dubbed "Operation Twist," at its September 2011 meeting by a 7-3 vote after what the transcripts showed was a lengthy and at times contentious debate. Under the program, the Fed sold $400 billion in short-term U.S. government debt and used the money to buy longer-term debt as a way to lower long-term rates and spark economic growth.