Eleven days before lowering the discount rate to stimulate dried up credit markets, members of the Federal Reserve Board characterized the overall economy as "relatively healthy" and said they expected moderate economic expansion.

Minutes of the Fed's Aug. 6 discount rate meeting were released Tuesday and indicate policymakers were concerned about the downside risk of the weak housing market.

Though some Fed officials noted that conditions were tightening for borrowers, the central bank was optimistic about future growth and held the discount rate at 6.25%.

But the tone was more somber on Aug. 17, when the Fed lowered the discount rate by 50 basis points, to 5.75%, and released a statement acknowledging "tighter credit conditions and increased uncertainty."

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