Federal Reserve Could React To Stalled Economy


The Federal Open Market Committee will address the failure of the $2.3 trillion bond buying that failed to spur sufficient economic growth and reduce the unemployment levels to below 9 percent.A stalled U.S. economy and a plunging stock market may lead the Federal Reserve to react with the limited resources that it has left at its disposal, The Associated Press reported.

The central bank for the U.S. is expected to acknowledge its part in the adverse trends that have occurred since the policy-making committee for the organization met in June. While this is viewed as the minimal action that will occur, many private economists have predicted that Chairman Ben Bernanke and his colleagues will do more than just admit their inadequacy, according to the news outlet.

Bernanke had said in July that the organization would consider more stimulus only if the U.S. economy were to weaken more than it already had, a statement that has now caused analysts to predict further government intervention in the form of another stimulus, reported the AP.

“I don’t think the Fed can stand by,” Mark Zandi, chief economist at Moody’s Analytics, told the news agency. “This is a crisis of confidence and the Fed needs to shore up confidence.”

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