INSTANT VIEW: Fed sees risk of uncomfortably low inflation

NEW YORK (Reuters) - U.S. Federal Reserve policy makers wanted to send a clear message that they intended to keep interest rates very low for a long time to help the economy recover from a recession, minutes of their December meeting showed on Tuesday.

KEY POINTS: * "Participants judged that communicating the committee's expectation that short-term interest rates were likely to stay exceptionally low for some time could be useful," the Fed minutes said.

COMMENTS:

CARL LANTZ, U.S. INTEREST RATE STRATEGIST, CREDIT SUISSE, NEW

YORK:

"They are very downbeat on the economy as you would expect, talking about keeping rates low for a long time, highlighting the importance of getting mortgage rates down."

"There is some discussion of maybe introducing quantitative targets -- i.e. actually having an explicit target for the balance sheet -- although they didn't really commit to doing that."

"Now the question becomes what they are going to tell us at every meeting. They are obviously not going to hike, they're not going to cut.

"If they want to really say something concrete in terms of changing the policy stance it would have to be something like, 'We're increasing our target for excess reserves or for bank reserves to Y from X'. It's just basically a way to communicate what they think the thrust of policy is... to say 'Things are really bad so we are easing further by taking the balance sheet up another $200 billion'."