Fed May Weigh More Stimulus on Flagging Recovery Signs

Discussion in 'Wall St. News' started by ASusilovic, Aug 2, 2011.

  1. Aug. 2 (Bloomberg) -- Federal Reserve policy makers may start weighing additional steps to prop up the recovery after growth fell below 1 percent in the first half of this year and economists began cutting second-half growth forecasts.

    “At a minimum, the FOMC will have a serious debate about the policy options -- what they should do, and what they expect to get from it,” said Roberto Perli, a former associate director in the Fed’s Division of Monetary Affairs, referring to the Federal Open Market Committee. “Growth in the first half was dangerously close to zero,” said Perli, director of policy research at International Strategy & Investment Group.

    The FOMC will meet Aug. 9 in Washington after the government marked down its measure of economic growth to annual rates of 0.4 percent in the first quarter and 1.3 percent in the second, casting doubt on the Fed’s June outlook of 2.7 percent to 2.9 percent growth for this year. A gauge of U.S. manufacturing, a main engine for the expansion, slumped last month to the lowest level in two years.

    Chairman Ben S. Bernanke said in congressional testimony in July that the Fed may take new action if the economy stalls, including beginning a third round of bond purchases. The central bank could also cut the interest rate it pays banks on excess reserves and pledge to hold its assets at a record high and interest rates at record lows for a longer period, he said.

    Any effort by Bernanke to expand the Fed’s $2.87 trillion balance sheet would probably meet resistance from district Fed presidents, including Philadelphia’s Charles Plosser, who have said bond purchases and low borrowing costs have already pushed up long-term inflation risks too high.


    QE III is coming shortly in all media outlets around you...., :cool:
  2. Cuz QE I and QE II worked so well.

    Don't they see that the road they are kicking the can down is a dead end?
  3. Thats great news for the shorts.

    S&P at very Dangerous levels and QE3 will signal FED PANIC, possible causing capitulation, which WALL STREET will call "A FLASH CRASH".

    Game over. This market is nothing but Hot Air. Nobody even cares about the Market except the poor fools who have their money in it on the long end.

    ECONOMY STUPID. Numbers are horrid and unemployment numbers will come in on a huge surprise to the downside.

    It is all about "LOCAL ECONOMIES" now people. If you not in a local economy that is doing ok....you are FUCKED!
  4. If you kick the can down the road enough times, eventually somebody will pick it up and recycle it.
  5. S2007S


    Yep QE1 and QE2 worked extremely well so lets push QE3 and get ready for another fucked up prop job. As I said years back this economy cannot be fixed with stimulus, its a broken economy. The more stimulus and more worthless dollars they throw at the economy the worse the situation will be moving forward, why doesnt anyone fucking comprehend this!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  6. Oh yeah, anyone paying attention comprehends that the stimulus does nothing for the real ecomony. The purpose of stimulus is simply to inflate the currency and thus give a backdoor bailout to banks by re-inflating their collapsed loan cycle. It's all about shifting bank losses onto pensioners, foreign bond holders, etc. But the talking heads on TV have to squawk about this as if shuffling paper has anything to do with real production.
  7. +1
  8. UNfortunately, foreign bond holders are as stupid as the rest of the world in accepting the leadership of the US of A in economic matters...
  9. Creating money via accounting entries is very grueling work.

    The butt sores from sitting in the overstuffed leather chairs are debilitating.

    But the ability to leech off the REAL productive economy is its own reward. :D
  10. TGregg


    Kick the can eventually comes to an end.

    Question is, how does that end play out?
    #10     Aug 2, 2011