Tuesday, August 02, 2011

What more can the Fed do now?

With the U.S. economy flatlining and at risk of falling into a new recession, the Federal Reserve lacks good tools to do much of anything about it — though that won’t necessarily stop the central bank from trying.

The Fed has a policy of ultra-low interest rates and other unconventional steps to pump up the economy already in place. But the central bank has declined to take any new actions to try to further loosen monetary policy this year, amid projections that economic growth will rebound in the second half of the year. But the most recent data has made those predictions look more doubtful.
Read the rest here.

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