Fed Chairman Ben Bernanke in command of the FOMC - centralbanking.com  The FOMC minutes for the two-day November meeting suggest that under current economic circumstances the Federal Reserve will have to engage in a third round of quantitative easing. A few members of the FOMC pushed Bernanke for further accommodative policy in the last FOMC meeting, with Charlie Evans of the Chicago Fed actually dissenting in favor of more QE.  Revealing the internal workings of the FOMC, the minutes are a key tool for Fed Chairman Ben Bernanke to manage market expectations. This was made very clear when a few members asked for further accommodation at the last meeting. It was also made clear that Bernanke is firmly in control, from the statement:  It was noted that any such accommodation would likely be more effective if it were provided in the context of a future communications initiative, and most of these members agreed that they could support retention of the current policy stance at this meeting. […]  With the Committee in the process of reviewing its monetary policy strategies and communication, and no additional accommodation being provided at this meeting, a few members indicated that they could support the Committee’s decision even though they had not favored recent policy actions.  In other words, those who favored further monetary stimulus in the last meeting accepted that QE should be unveiled in the context of a “communications initiative,” which means making sure that market expectations are aligned with the Fed’s.  It also becomes clear that those who were against further policy accommodation, Plosser, Kocherlakota, and Fisher, have accepted the FOMC’s, and therefore Bernanke’s decision and won’t oppose it.  On the point of dissenters, Charlie Evans, the lone dissenter at the November meeting, was actually pushing for further accommodation, putting him closer to the Bernanke camp than those opposed to Operation Twist. All of these add up to a Chairman who, despite an impressive amount of dissent, still holds the monetary policy reins.  The minutes also revealed that FOMC members are concerned with the state of the economy. Unemployment remains too high, and growth, dragged down by a weak housing market, remains too low. Private sector employment appears to be slowing and inflation has begun to ease. The U.S. financial sector is on the ropes, as this year’s stock price action by big names like Goldman Sachs, JPMorgan, and Citi reveals, and consumption has slowed.  Furthermore, the international situation looks ugly and two major central banks, those of Japan and England, have already “announced expansions of their respective asset purchase programs.”  The Fed, therefore, is ready to act if it believes it isn’t complying with its dual mandate of price stability and full employment. According to the minutes:  [FOMC] members generally anticipated that unemployment would decline only gradually from levels significantly above those that the Committee would expect to prevail in the longer run,” read the minutes, “with inflation likely to settle at levels at or below those consistent with the Committee’s dual mandate.  With the Fed failing at both of its objectives, and projections for the situation to remain pretty much the same next year, it seems like Bernanke will have pull on the trigger on QE3.
The minutes for the early November FOMC meeting reveal a commanding Bernanke that has managed to get hawks and dove to follow him, despite many dissents, and suggesting QE3 is coming if the economy continues its path.