Economy’s ‘training wheels’ to come off
CNNMoney | June 22
The Federal Reserve’s latest round of stimulus ends on June 30, but economists think it’s no big deal. The policy, known as the second round of quantitative easing, or QE2 for short, is likely to have little effect on financial markets or the pace of the recovery, they say. “I don’t think the end of QE2 will have any significant immediate impact on interest rates, stock prices, jobs or the broader economy,” said Mark Zandi, chief economist with Moody’s Analytics.
Bernanke May Try to Spur U.S. Economic Growth by Extending Record Stimulus
Bloomberg | June 21
Federal Reserve Chairman Ben S. Bernanke will probably delay the central bank’s exit from record stimulus, economists said in a survey, giving the flagging economy a boost without resorting to additional asset purchases. Seventy-nine percent of 58 economists expect Bernanke to sustain the Fed balance sheet at current levels until October or later, compared with 52 percent who held that view before the Fed’s last policy meeting in April, according to a Bloomberg News survey conducted last week. Ninety percent of those surveyed predict the Fed will wait until the fourth quarter before dropping its pledge to hold interest rates low for an “extended period.”