Tuesday, August 9, 2011


The Federal Reserve meets today amid the global market turmoil of recent days and will discuss its next steps, but those expecting a big move like QE3 are likely to be disappointed.
Fed Chairman Ben Bernanke has shown a willingness to take extraordinary steps to revive the economy, and there is a good chance the Fed may take some action today. In testimony last month, Bernanke made clear that the Fed is prepared to act if necessary. He said: “The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support. Even with the federal funds rate close to zero, we have a number of ways in which we could act to ease financial conditions further.”