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updated 8/30/2011 4:48:49 PM ET 2011-08-30T20:48:49

Some Federal Reserve officials pushed in August for a more aggressive response to the economy's slowdown. They settled for a plan to keep rates near zero for another two years and a won agreement to discuss more options at an extended meeting in September.

Minutes of the Aug. 9 policy meeting released Tuesday show that Fed officials discussed a range of actions, including another round of Treasury bond purchases. Some Fed officials said a weaker economy called for such a step.

Fed officials in the end said they planned to keep rates low until at least mid-2013, assuming the economy remained weak. They also added a second day to their September meeting. That raised speculation that the Fed would announce some further action after that meeting.

Three Fed members opposed any steps for fear they could ignite inflation. The 7-3 vote after the meeting marked the first time in nearly 20 years that at least three members dissented from a Fed statement.

Stocks rose modestly after the minutes were released. The Dow Jones industrial average closed up 20 points for the day. Broader indexes also gained.

The minutes show Fed officials discussed the two-year plan to keep interest rates near zero, a third round of bond purchases, and shifting the mix of the Fed's holdings into long-term Treasury securities. Some members also raised the idea of tying record-low interest rates to a level of unemployment or inflation, instead of the set time period.

The bond purchases are intended to keep long-term rates low and aid the economy. The second round of bond purchases, announced last year, sparked a 28 percent rally in the Dow through April 29.

Charles Evans, the president of the Federal Reserve Bank of Chicago, said Tuesday that he was one of the Fed officials who favored more aggressive policy actions. He was also one of the seven officials who supported the two-year plan for keeping rates near zero.

"Strong accommodation needs to be in place for a substantial period of time," Evans said in an interview on CNBC.

Analysts have speculated that such a high level of dissent makes it harder for Fed Chairman Ben Bernanke to rally support for more action. Others say the August vote shows Bernanke is willing to press forward, even with a divided board.

And at least one of the dissenters may be softening his opposition. Narayana Kocherlakota, president of Federal Reserve Bank of Minneapolis, said Tuesday that he would not seek to overturn the August decision at future meetings. He said such a move would undercut the Fed's ability to take similar actions in the future.

Investors had hoped Bernanke would provide details of the Fed's next moves during a highly anticipated speech in Jackson Hole, Wyo. But Bernanke offered no new steps. He did say the central bank would extend its September meeting to two days to allow for a fuller discussion. On Tuesday, the minutes show that the board had pushed for the longer meeting.

Story: Bernanke bets time will heal economy's wounds

A turbulent summer has fueled fears that the U.S. is on the verge of another recession.

The economy grew at an annual rate of just 0.7 percent in the first six months of this year, the weakest performance since the recession ended two years ago. Europe's debt crisis has intensified. U.S. lawmakers fought over increasing the nation's debt limit, and only agreed to do so hours before a potential default. That prompted Standard & Poor's to lower its rating on U.S. long-term debt for the first time in history.

Stocks plunged in late July and early August. The Dow has lost nearly 11 percent of its value since July 21.

A handful of reports showed that growth picked up at the start of July-September quarter. In July, consumers spending rose by the most in five months, the economy created twice the number of jobs as in each of the previous two months, and a rebound in the auto sector drove factory production up by the most since the Japan crisis.

Still, consumer confidence in the economy plunged in August to a two-year low, according to a report Tuesday from the Conference Board. The downgrade in U.S. debt and the stock market plunge likely contributed to the decline.

A key question for the economy is whether consumers and business will continue to pull back on spending this fall.

The Fed minutes also showed that the central bank held an unscheduled videoconference on Aug. 1 to discuss their options if Congress did not increase the borrowing limit in time to avoid a default. The minutes did not provide details on what actions were discussed.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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