Federal Reserve Board Chairman Ben Bernanke speaks during a news conference.
Federal Reserve Board Chairman Ben Bernanke speaks during a news conference. - 
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Jeff Horwich: The head of the Federal Reserve Bank of St. Louis has done his bit this morning to rain on the "fed stimulus" parade. Newly released minutes from this month's Federal Reserve board meeting suggest the Fed is ready for another round of "quantitative easing" -- call it "QE3" -- if economic conditions don't improve. Well, St. Louis fed chief James Bullard says conditions have improved the past few weeks -- and we should all view those minutes as dated. But they nonetheless give some critical insight into a Fed board that seems ready to act if necessary.

Here's Marketplace's Scott Tong.

Scott Tong: So here’s a tasty nugget from the Fed minutes. Quote: “Many members judged that additional monetary accommodation would likely be warranted fairly soon.”

Why? The meeting noted U.S. economy activity had “decelerated.” Hiring and manufacturing were soft, as was the global economy.

The upshot: Quincy Krosby over at Prudential Financial says for many traders the question is not if QE3, but when? Also, what type of bonds will the Fed buy?

Quincy Krosby: They sometimes joke that they may have to buy "James Bond" when all is said and done. They can can buy any bonds they want. And they have also been big buyers of mortgage-backed securities. If the Fed decides to focus on mortgage-backed securities, you’re going to see interest rates and mortgage rates come down much more.

But of course, Krosby notes it’s not a done deal. The economy could speed up. And QE3 opponents at the Fed argue buying bonds to nudge down interest rates is just a short-term fix.

A week from tomorrow, Fed chairman Ben Bernanke speaks to central bankers around the world. That’s the next tea leaf -- read away.

In Washington, I’m Scott Tong for Marketplace.

Follow Scott Tong at @tongscott