Fed To Meet Tomorrow, Wednesday August 10th
August 9, 2010 by Erin Schedler · Leave a Comment
The Federal Reserve
See article below. I doubt interest rates will be affected, but the big question is if they plan on increased purchasing of mortgage-backed securities (MBS):
Confronted with a U.S. economy that appears to be decelerating, the Federal Reserve may ratchet up cautionary language but many expect the central bank will refrain from buying more bonds to bolster growth.
“I am sure they are going to do nothing,” said Bill Cheney, chief economist at John Hancock in Boston.
“The whole question” will surround the language of the statement, he said, where the central bank will want to stress it is “on the job and aware of downside potential,” Cheney said.
The Federal Reserve is due to announce its decision from its one-day meeting on Tuesday at 2:15 p.m. Eastern.
The pace of the recovery has been slowing, putting pressure on the Fed to act to ward off a double-dip recession and falling consumer prices known as deflation.
After the weak job report for July on Friday, pressure for the Fed to take action mounted in financial markets, said John Canally, economist at LPL Financial Corp. in Boston. Economists at Goldman Sachs said Friday they expect the central bank to reinvest the income from mortgage-backed securities it holds back into the bond market – a “baby step,” in their words, in the direction of unconventional easing.
