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Will the Fed Announce More Stimulus?

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  • Description

    FBN's Peter Barnes breaks down expectations from the Fed meeting.

  • Duration 1:53
  • Date

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The -- highly anticipated policy meeting is underway and the expectation is that they will announce some form of -- stimulus tomorrow but critics are questioning its.

-- factor flows out of bonds has more historically about.

Well -- actually that's right most economists expect the Fed to pull the trigger on some kind of easing at this meeting the betting is that it will at least extend the period.

It plans to keep short term interest rates low and to 2015.

Currently.

It's to the end of 2014.

And it might also launch a new round of bond buying quantitative easing QE3.

To push interest rates down on mortgages business loans and other loans even more.

Basically printing more money pushing it out there to make it cheaper to borrow.

One former fed economist says Ben Bernanke sent that clear signal he is ready to make this move in his speech to central bankers last month and Jackson Hole.

The Fed has been missing badly on the info on the unemployment part of the dual mandate and that was made very clear and chairman's speech at Jackson Hole where he talked about -- grave unemployment situation.

That's a very strong word for policymakers to use and so I think that was clearly signal that the Fed is going to act at this meeting.

But critics say the problems in the economy cannot be fixed by the Fed -- up its printing press.

Job creation is largely a function of what.

This -- think the future holds for them.

And they then expand to plant and equipment and responded that view vision of the future that vision of the future is murky right now because of tax increases meltdown in Europe.

And the probability.

Of a downgrade of US debt.

They'll -- and others worry cheaper money could just create more bubbles in housing and other assets and also could sow the seeds.

Far higher inflation actually.

And -- risks all will be revealed tomorrow -- about.

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