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Fed split on stimulus as economy weakens

WASHINGTON --- Federal Reserve officials at their last meeting expressed concerns that the weakening job market might hold back the recovery. But members were divided over whether the Fed should consider taking additional steps to help the economy.

The Fed agreed at the June meeting to end on schedule its program to boost the economy through the purchase of $600 billion in Treasury bonds.

Some members said the Fed should be open to new stimulus measures if growth failed to pick up enough to "meaningfully" reduce the unemployment rate, according to minutes of the Fed's June 21-22 meeting.

Others expressed concerns about inflation and said the central bank would need to take steps to begin removing its low-interest rate policies "sooner than currently anticipated."

Moody's cuts Ireland's rating to junk status

BRUSSELS --- Moody's Investors Service on Tuesday downgraded Ireland's government bond ratings to junk, dealing a further blow to the eurozone as it struggles to contain a debt crisis.

Moody's said it cut Ireland's rating by one notch to Ba1 from Baa3 because it sees a growing risk the debt-ridden country will need a second bailout once its current rescue package expires at the end of 2013.

Banks and other private investors will likely be asked to contribute to any new bailout, for instance by giving Ireland more time to repay its bonds, Moody's said. Such private sector involvement is being negotiated for Greece, the first eurozone country that had to be bailed out and which now is negotiating its second rescue package within a little more than a year.

Oil imports drove up May trade deficit

WASHINGTON --- The U.S. trade deficit surged in May to the highest level in more than 21/2 years, driven upward by a big increase in oil imports.

The Commerce Department said Tuesday that the deficit increased 15.1 percent to $50.2 billion in May. That's the largest imbalance since October 2008.

Exports fell 0.5 percent to $174.9 billion. Imports rose 2.6 percent to $225.1 billion. Oil prices have fallen since May, so the effect of higher prices should ease in the coming months.

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