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FED looks at third round of easing

FED looks at third round of easing

The recent slowdown in US economic growth is forcing the Federal Reserve to consider something for which it has always set the bar very high: a third round of quantitative easing.

Robin Harding in Washington
July 22, 2012 6:33 pm

The recent slowdown in US economic growth is forcing the Federal Reserve to consider something for which it has always set the bar very high: a third round of quantitative easing.

A decision on whether to launch another round of asset purchases remains in the balance as the central bank wrestles with a complicated economic outlook and uncertainty about the costs and benefits of its easing tools.

In an interview with the Financial Times, John Williams, president of the San Francisco Fed, said that the weak outlook and the extent of downside risks “would argue for further action” but the counter-argument was doubts about tools such as QE3.

However, Fed officials are determined to ensure that the economy makes progress towards lower unemployment. In June, the rate-setting Federal Open Market Committee still forecast a decline in the unemployment rate over the next few years, albeit very slowly. Any downgrade to that forecast would be a likely trigger for further action

Continued:
http://www.ft.com/cms/s/0/7015fcfc-d419-11e1-942c-00144feabd...



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