More Fed Action Expected All indications suggest the easy-money policy will continue, at least for a while.

The bank hoped to stimulate borrowing, investment and growth, but the easy-money policy has largely failed to do so.

The hope is that the coalition could gradually wean large enterprises and the central bank from their easy-money policies and keep inflation from wrecking reform.

In January, the Fed inched away from that commitment by announcing that it would be "patient" before it moved away from its easy-money policy.

"What is likely is that the Fed will continue an easy-money policy for an extended period," he said.

Such high rates would damp economic growth, putting more pressure on the Fed to return to the low-interest, easy-money policy we have seen in the past few years.

Real-estate speculation touched off by the easy-money policy is now beginning to come under control.

"The market had run up so high because of the easy-money policies of the Federal Reserve," Mr. Garraty said.

Since last May, when the Bank of Japan ended its easy-money policy, there have been four increases in the official discount rate (from 2.5% to 5.25%).

Ms. Seger, who has eight years remaining of her 14-year term, is the board's most outspoken advocate of an easy-money policy to keep economic growth vigorous.