What will the Fed do this afternoon?by Tim Manni
Many market observers are expecting the Federal Reserve to announce a new form of economic policy this afternoon following their two-day FOMC meeting.
What type of economic policy? Well, that remains to be seen.
On Monday, we provided some analysis of a few possible strategies the Fed could announce today, but at the moment, most of us are expecting that the Fed will announce plans to “buy longer dated Treasury securities in a bid to hold down interest rates.”
While many agree that our economy is in desperate need of assistance, not everyone agrees that the Fed should take the reins.
Republican lawmakers sent Fed chairman Ben Bernanke a letter this week urging him not enact any more economic policies:
The congressional Republican leadership sent a letter this week to Federal Reserve Board Chairman Ben Bernanke urging him to refrain from any more easing moves, saying that the American economy should be driven by consumer confidence and worker innovation and not central-bank policy. Such moves could hurt the U.S. dollar, the letter said. “We have serious concerns that further intervention by the Fed could exacerbate current problems or further harm the U.S. economy,” the letter from the GOP congressional leaders added.
Will the strong words from lawmakers deter the Fed?
We expect a statement following the conclusion of the two-day FOMC meeting this afternoon. We’ll update you shortly.