Economic crisis looming, Fed says (Politico)

If the economy continues to lose momentum, Federal Reserve policymakers agreed that they might need to take more action to support growth. Fed officials showed concern about what could happen to the struggling economy if Congress fails to avert tax hikes and across-the-board spending cuts that kick in at the end of the year, according to the minutes from their June meeting. Defense contractors are already laying plans for layoffs if Congress is not successful. The Fed did extend a program that shifts its bond portfolio to try to lower long-term interest rates. Launching a new program of bond purchases to further help the economy is a possibility the Fed said.