Few think Ben Bernanke to signal action
By Paul Wiseman, APWASHINGTON -- Investors are hoping Chairman Ben Bernanke will at least hint Friday that the Federal Reserve is ready to launch another round of bond purchases to try to lower long-term U.S. interest rates and spur more borrowing and spending.
August 31, 2012, 12:27 am TWN
He's unlikely to deliver.
Economists who monitor the Fed doubt Bernanke will say anything dramatic when he speaks at an annual economic conference in Jackson Hole, Wyoming. Many think a slightly brighter economic outlook has lessened the urgency for the Fed to act soon.
“I don't expect him to give some significant clue as to what the Fed's next move is,” says economist Timothy Duy at the University of Oregon.
At the end of every August, economists and central bankers convene in the Rocky Mountains at a symposium organized by the Federal Reserve Bank of Kansas City. They present papers and argue about economic issues. But mostly, they wait to see what the Fed chairman has to say.
In August 2010, Bernanke's remarks at Jackson Hole triggered a sustained stock-market rally. He hinted then that the Fed might begin a second round of bond purchases, a policy called quantitative easing, or QE2. The Fed did start buying bonds three months later.
The United States economy is again struggling to grow. It expanded at a tepid annual rate of 1.7 percent in the April to June quarter, the government estimated Wednesday.
Hopes for further Fed action rose last week when the central bank released minutes of its July 31-Aug. 1 meeting. It showed that officials spoke with increased urgency about the need to provide more help for the U.S. economy.