US Fed makes waves with hints of QE2

first_img KCS-content Tuesday 21 September 2010 8:32 pm THE US Federal Reserve suggested it could enter another round of quantitative easing (QE) yesterday, as its rate-setting panel met in Washington to decide whether to intervene in the shaky economy. The Federal Open Market Committee (FOMC) departed from previous language in its monthly statement, saying it “is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate”. After its meeting in August, the Fed had simply said it would “employ its policy tools as necessary”. Pressure has been growing on Fed chairman Ben Bernanke to consider pouring billions of pounds into the US economy, described by some as QE2. Recent figures showed that 9.6 per cent of the workforce is unemployed, while growth in the second quarter slowed to a yearly rate of 1.6 per cent. “Prior to today’s statement, Fed officials indicated that the economy would have to slow further from here to justify additional easing,” said Société Générale analyst Aneta Markowska in a note. “The new language implies a potential shift in the Fed’s reaction function whereby several quarters of slow growth may be enough to justify further action.”The Fed last intervened in 2008, when it bought $1.7 trillion (£1.06 trillion)?in longer-term bonds.The FOMC decided to hold interest rates at between zero and 0.25 per cent, as expected, with only inflation hawk Thomas Hoenig dissenting. Hoenig has disagreed with the nine-strong panel for the last six months, and explained in the committee’s statement he believes the continued low level “will lead to future imbalances that undermine stable long-run growth”. US bonds surged following the meeting yesterday afternoon, with the yield on the two-year note hitting a record low, and the dollar fell sharply. Show Comments ▼ whatsapp US Fed makes waves with hints of QE2 center_img by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastNoteabley25 Funny Notes Written By StrangersNoteableyMoneyPailShe Was Famous, Now She Works In {State}MoneyPailPeople TodayNewborn’s Strange Behavior Troubles Mom, 40 Years Later She Finds The Reason Behind ItPeople TodaySerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesBrake For ItThe Most Worthless Cars Ever MadeBrake For ItBetterBe20 Stunning Female AthletesBetterBemoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.com Share Read This Next’A Quiet Place Part II’ Sets Pandemic Record in Debut WeekendFamily ProofHiking Gadgets: Amazon Deals Perfect For Your Next AdventureFamily ProofBack on the Rails for Summer New York to New Orleans, Savannah and MiamiFamily ProofYoga for Beginners: 3 Different Types of Yoga You Should TryFamily ProofAmazon roars for MGM’s lion, paying $8.45 billion for studio behind JamesFamily ProofIndian Spiced Vegetable Nuggets: Recipes Worth CookingFamily ProofTortilla Mango Cups: Recipes Worth CookingFamily ProofWhat to Know About ‘Loki’ Ahead of Disney+ Premier on June 9Family ProofCheese Crostini: Delicious Recipes Worth CookingFamily Proof whatsapp Tags: NULLlast_img