Quantitative Easing: Fed to meet facing huge stimulus hopes

Recent statements suggest that current economic conditions were unlikely to merit additional stimulus.

WASHINGTON: The plodding US economy, meagre job growth and market tensions over Europe’s debt crisis will hang over Federal Reserve policymakers when they meet next week. A recent string of weak data on the economy, from rising jobless claims to easing inflation as gasoline prices retrench, has raised speculation that the Fed may act to boost growth. But economists are divided on whether there is enough evidence to convince the Fed to unleash new stimulus, and recent comments from central bank officials have produced mixed signals. Investors appeared to have no such doubts, betting a Fed stimulus could be announced Wednesday that will pump liquidity into the markets.  Recent statements by senior Fed officials, including Chairman Ben Bernanke, suggest that current economic conditions were unlikely to merit additional stimulus, they said.”We believe economic and financial conditions have deteriorated enough to push the Fed into providing more stimulus,” said Barclays Capital analyst Marion Laboure.

Published In The Express Tribune, June 17^th, 2012.