Instant View: Glum Fed considered even bolder action in August

Reuters

NEW YORK (Reuters) - The U.S. Federal Reserve considered a range of actions to help a struggling economy at its August meeting, including the unprecedented step of tying the interest rate policy outlook to a specific unemployment level.

COMMENTS:

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PAUL BALLEW, CHIEF EDCONOMIST, NATIONWIDE, COLUMBUS, OHIO

"Clearly reading the minutes, the Fed was having a discussion of the labor slack in the third quarter and what type of action to take. We are not convinced that will lead to a course of action next month, but it will be vigorously discussed. Still, it's interesting to see the debate and what was captured in the minutes.

"I'm not entirely sold a plan will come out of next month's meeting, but you are not going to get a passive message no matter what."

BRIAN DOLAN, CHIEF STRATEGIST, FOREX.COM, BEDMINSTER, NEW

JERSEY

JOHN BRADY, FUTURES TRADER, MF GLOBAL SECURITIES, CHICAGO

"They're dovish; they lean dovish. We knew that coming out of Jackson Hole. I think the employment number and the ISM number are going to tilt them in whatever direction they're going to go. Thursday, Friday, employment and ISM, that will give them the mandate."

MARKET REACTION:

STOCKS: U.S. stocks held onto slight earlier losses

BONDS: U.S. Treasury prices slightly extend gains.

FOREX: The dollar briefly pares gains versus euro