WASHINGTON, May 21 (Xinhua) -- The U.S. Federal Reserve has begun to discuss the tool options to raise interest rates as the economy improves, but it does not indicate the actions will take place imminently, according to the latest minutes of the Federal Open Market Committee's April meeting released Wednesday.
"A staff presentation outlined several approaches to raising short-term interest rates when it becomes appropriate to do so," said the minutes of the April 29-30 meeting of the FOMC, the Fed's policy-setting arm. The "discussion of this topic was undertaken as part of prudent planning and did not imply that normalization would necessarily begin sometime soon."
In addition to the rate of interest paid on excess reserve balances, participants discussed tools including fixed-rate overnight reverse repurchase operations, term reverse repurchase agreements, and the Term Deposit Facility.
"No decisions regarding policy normalization were taken", said the minutes, and participants requested additional analysis from the staff and agreed that it would be helpful to continue to review these issues at upcoming meetings.
With the economy having gradually moving out of the prolonged hardships since 2008, the Fed started tapering its bond-purchase program by 10 billion U.S. dollars at every policy making meeting since January. It is expected to end the massive stimulus this fall, and is widely expected to raise interest rates in the mid- 2015.
The Fed also eyes controlling the level of short-term interest rates once they are above the effective lower bound, when it will have a very large balance sheet, according to the minutes.
In their discussion of the economic situation and the outlook, participants generally indicated that their assessment of the economic outlook had not changed materially since the March meeting.
Severe winter weather had contributed to a sharp slowing activity during the first quarter, but recent indicators pointed to a rebound and suggested the economy had returned to moderate growth.
"However, some participants remarked that it was too early to confirm that the bounceback in economic activity would put the economy on a path of sustained above-trend economic growth," said the minutes.
A number of participants pointed to possible sources of downside risk to growth, including a persistent slowdown in the housing sector or potential international developments, such as a further slowing of growth in China or an increase in geopolitical tensions regarding Russia and Ukraine.
In general, participants continued to view the risks to the outlook for the economy and the labor market as nearly balanced.
The Fed has kept the key federal funds rate between zero and 0. 25 percent since December 2008, part of the central bank's ultra- loose monetary policy aimed at boosting the economy from the worst recession in decades.