April 2014
Search    

Fed intends to act to boost economy

Fed intends to act to boost economy not ratednot ratednot ratednot ratednot rated

Be the first to comment

Federal Reserve Chairman Ben Bernanke announced the Fed is prepared to act to boost the economy, according to The Washington Post. The Fed is responding to recent low inflation and unemployment's slow recovery.

Analysts expect the Fed to announce its efforts to strengthen growth after the Fed's next policy meeting Nov. 2 and 3. Although Bernanke says the Fed will weigh the potential costs and risks of unconventional efforts to boost the economy, the Fed is expected to announce plans to purchase hundreds of billions of dollars in bonds, which would lower long-term interest rates and make it cheaper for Americans to take out a mortgage or for businesses to borrow money to build a new factory.

Recently, most measures of inflation have been around the 1 percent range, and the trend most likely will continue.

"In effect, inflation is running at rates that are too low relative to the levels the committee judges to be most consistent with the Federal Reserve's dual mandate in the longer run," Bernanke says.

Bernanke did not mention some recent unconventional steps that have been discussed, such as temporarily raising the Fed's target for inflation to make up for below-trend inflation.

Since the financial crisis in 2008, the Fed's balance sheet has nearly tripled to about $2.3 trillion. Most of the increase is attributed to the Fed purchasing $1.7 trillion in mortgage-related securities and Treasury securities in 2009-10.


10/18/2010

Comments (0) Login to post a comment or rating
There are no comments posted.

NRCA NRCA