(Reuters) - The Kansas City Federal Reserve Bank was the only institution in the Fed system to seek increases in the rate the Fed charges banks for emergency loans before the central bank's policy meeting in early November, meeting minutes showed on Tuesday.

The Dallas Fed, which had sought an increase in the rate, known as the discount rate, in mid-September, joined the other 11 regional Fed banks in agreeing to keep the rate at 0.75 percent.

The discount rate is distinct from the Fed's principal tool for setting monetary policy, the fed funds rate. The Fed cut the fed funds rate to near zero in December 2008 to pull the economy out of a deep recession.

Fed bank heads said there had been small improvements to the economic recovery, but that financial turmoil due to the sovereign debt crisis in Europe posed a risk.

With the economy growing modestly and energy and commodity prices receding, most bank heads supported keeping the discount rate steady, the minutes said. The minutes covered meetings held from late September through Oct. 31. (Reporting by Mark Felsenthal, Editing by Andrea Ricci)

Granted, we've already seen a few of the early-crowd lenders reprice for the better, but if current levels are sustained or improved upon, additional lenders could get on board. Fannie 3.5's are currently 3 ticks better than yesterday's heady closing levels, but more importantly, are 4 ticks over the important 101-26 pivot. Deal's off if prices fall back below there, but remains on otherwise (and increasingly so with more time or further gains).

Bond markets are recovering now after losing a bit of ground into the AM hours. None of the movement so far has been enough for a reprice for the worse, but perhaps "close" on a few occasions. Those close calls were the moments during which MBS threatened to break lower past the 101-16 level.

Although it looks like we're nearing some sort of "decision time" for 10yr yields (choosing between 2% and 2.02%, it's really OK whichever direction they break. Broader trend between 1.95 and 2.07 is firmly intact so far today and we wouldn't be too concerned about an MBS reprice until we saw yields break back above today's previous highs. This, of course, assumes MBS follows suit with a break of 101-16 in Fannie 3.5's. Until/unless that happens, what started as a ho-hum day, continues to be ho-hum until further notice.

(Reuters) - Janet Yellen, the Federal Reserve's influential vice chair, said on Tuesday the U.S. central bank has room to ease monetary policy further to support a tenuous economic recovery.

Yellen said turmoil in financial markets stemming from both Europe's banking crisis and general uncertainty about the outlook had increased the risks to the global economy, and that the Fed could offer additional support to U.S. growth.

"The scope remains to provide additional accommodation through enhanced guidance on the path of the federal funds rate or through additional purchases of long-term financial assets," Yellen said in remarks prepared for delivery to a conference sponsored by the San Francisco Federal Reserve Bank.

Yellen also called for policies to spur a faster recovery in the battered U.S. housing market, although she did not provide any specific recommendations.

The Fed in September decided to dip its toes back into the housing market by reinvesting proceeds of maturing mortgage and housing agency debt from its portfolio back into the mortgage-backed securities market.

Yellen said the contribution to the U.S. recovery from housing, which is usually key to economic rebounds, is likely to remain tepid in the near term, and that consumer spending is also not likely to be a key source of growth due to high household debt levels. (Reporting by Ann Saphir; Writing by Pedro Nicolaci da Costa; Editing by Andrea Ricci)

U.S. house prices rose in the third quarter of 2011 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 0.2 percent higher on a seasonally adjusted basis in the third quarter than in the second quarter. On an unadjusted basis, prices rose 0.7 percent during the quarter. Over the past year, seasonally adjusted home prices fell 3.7 percent from the third quarter of 2010 to the third quarter of 2011. FHFA’s seasonally adjusted monthly index for September was up 0.9 percent from its August value. On a not-seasonally adjusted basis, prices were up 0.7 percent during the August to September period. Every census division but the East South Central division showed increases over the same period.