Fed meeting called as market turmoil fuels recession fears |
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By Staff and Wire Reports |
Monday, 08 August 2011 15:41 |
Since the Fed last met in June, Standard & Poor's has downgraded long-term U.S. debt, stock markets have plunged, Europe has struggled to contain its debt crisis and a range of indicators have shown the U.S. economy struggling to grow. Some economists say the Fed might offer a clearer indication of how long it intends to keep long-term interest rates at record lows. More explicit language on interest-rate policy might boost investors' confidence at a dangerous moment for the global economy. But economists don't expect the Fed to hint at another round of Treasury bond purchases. Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices. Fed Chairman Ben Bernanke isn't scheduled to speak after Tuesday's meeting. Bernanke this year made a historic change by scheduling news conferences after four of the Fed's eight policy meetings each year, but Tuesday's isn't one of them. The Fed's opportunity to calm the markets will come in the statement it will issue after the meeting. Later this month at the Fed's annual retreat in Jackson Hole, Wyo., Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil. In July, Bernanke told Congress that the Fed is ready to act if the economy slowed. He said the Fed could launch another round of bond purchases to stimulate growth. But he made clear the Fed had no plans for such a step. He also said the Fed could provide "more explicit guidance" about how long it planned to keep its key short-term rate at a record low near zero. "We have to keep all the options on the table; we don't know where the economy is going to go," Bernanke said. In the weeks since Bernanke spoke to Congress, the Dow Jones industrial average has lost nearly 15 percent of its value since July 21, tumbling more than 1,600 points in that time. "Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'. Add this page to your favorite Social Bookmarking websites ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |