US Federal Reserve policy makers have begun focusing on how to manage monetary policy as they move towards raising interest rates next year and ending their six-year-old crisis stance.
The minutes of the Federal Open Market Committee's (FOMC) April 29-30 meeting showed policy makers are looking at how to prepare the ground for lifting the benchmark federal funds rate from near zero, expected in mid-2015.
"The committee's discussion of this topic was undertaken as part of prudent planning and did not imply that normalisation would necessarily begin sometime soon," the minutes said.
"Because the Federal Reserve has not previously tightened the stance of policy while holding a large balance sheet, most participants judged that the committee should consider a range of options and be prepared to adjust the mix of its policy tools as warranted."
Fed officials discussed several approaches to policy when they raise short-term interest rates, but decided further study was needed.
Among the policy tools they looked at were a fixed-rate overnight reverse repo facility, the sale and repurchase of securities, and the term deposit facility, which offers banks an interest rate on deposits.
The Fed's key federal funds rate has been between zero and 0.25 per cent since December 2008, part of the central bank's unprecedented loose monetary policy aimed at helping the economy recover from the recession.
The FOMC officials also looked at "controlling" the level of short-term interest rates once they rise, "during a period when the Federal Reserve will have a very large balance sheet".
The Fed's balance sheet has swollen to $4.3 trillion.
In December, the FOMC decided to begin tapering the $85 billion a month quantitative-easing program.
Policy makers expected that, with appropriate monetary policy support, economic activity would expand at a "moderate pace" and labour market conditions would continue to "improve gradually."
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