Reuters - Video

Edition: US | UK | IN | CN | JP

Video

Next steps for the Federal Reserve

Thursday, August 30, 2012 - 02:35

Aug. 30 - Investors and economists are split over whether the Federal Reserve will launch another round of stimulus.

▲ Hide Transcript

View Transcript

Investors and economists are split over whether the Federal Reserve will launch another round of stimulus and policy makers meet in September. US economic growth slowed to one and a half percent in the second quarter and while nonfarm payrolls came in at -- better than expected 100 is 63000. In July. The jobless rate rose to eight point 3% for the economy needs about 150000. Jobs a month just to keep unemployment steady. Federal Reserve Chairman Ben Bernanke has repeatedly said the Fed is prepared to take action if unemployment failed to improve. Michael Woolfolk managing director at the Bank of New York Mellon says the Fed may be nearing that point. If we don't act at this time with all available. Monetary policy tools. We risk having. Unemployment. Stay. At these elevated levels. The markets have been lifted recently on expectations the Fed will act in September. But better than expected July retail sales may keep the Fed on hold. So this is maybe one of their last. Remaining bullets. And they don't wanna spend it unwisely. We would certainly could be looking at a double dip scenario at some point the next two years. And I think at that point that the Fed may wish to have this back they spend it now. Even if the Fed launches another round of quantitative easing the benefits are likely to be short term Stephen wood chief market strategist for Russell investments says. Fixing the economy is a long term issue. And anyone specific policy monetary fiscal is not gonna be the magic bullet this is going to be a long term discipline process of easy monetary policy. Fiscal discipline and instant and and and why is economic and social policies to accomplish the greater good. With the next fed meeting less than two months before the US presidential election. Critics say that any action or inaction would be politically motivated. I don't think that politics are gonna get in the way. The reason being is that everyone understands the economy is as weak right now it's a matter of what do we do to stimulate it. I think either way that the Fed's gonna be probably accused of being political or not political dependent on what side of the fence you said. Investors will be watching or any hint of that that's next in the what the Central Bank holds its annual meeting in Jackson Hole Wyoming and into the month. That's where Bernanke signaled the last round of stimulus and 2010. -- -- --

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Next steps for the Federal Reserve

Thursday, August 30, 2012 - 02:35