On Wednesday, the Federal Reserve slashed its forecast for growth and raised projections for unemployment.
The Fed said it was mulling the possibility of buying more mortgage debt to spur a struggling recovery.
From news.yahoo.com:
While members of the central bank’s policy-setting panel voted 9-1 to hold a steady course, one official urged more stimulative action now and Fed Chairman Ben Bernanke said Europe’s debt crisis posed big economic risks.
At a news conference after a two-day meeting, Bernanke said buying more mortgage-backed securities was an option to help the economy and added that the U.S. central bank was still looking for ways to give clearer guidance on its policy path.
“While we still expect that economic activity and labor market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow,” he said.
“The Fed probably wanted to preserve its ammo until there was more clarity on how the European sovereign debt crisis unfolds,” said Bernard Baumohl, chief global economist for The Economic Outlook Group, in Princeton, New Jersey.
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