Excerpt
A growing number of Federal Reserve officials have concluded that the central bank needs to expand its stimulus campaign unless the nation’s economy soon shows signs of improvement, including job growth.
The question is expected to dominate the agenda when the Fed’s policy-making committee meets next week, with some members pushing for immediate action while others seek to delay a decision at least until the committee’s next meeting in September, so they can see a few more weeks’ worth of economic data.
The Fed’s chairman, Ben S. Bernanke, told Congress last week that the options under consideration included a new round of asset purchases, or “quantitative easing,” often described as QE3. As part of any such program, officials increasingly favor expanding the Fed’s holdings of mortgage-backed securities for the first time since 2010.
Mr. Bernanke and other Fed officials are convinced that such a step would further drive down long-term interest rates and improve the pace of economic growth, but they are concerned that the benefits would be modest and the costs uncertain.
The Fed also could take the smaller step of extending its forecast that short-term interest rates would remain near zero beyond late 2014, but many economists regard such a step as unlikely to provide a significant jolt to growth.
Any significant action by the Fed will reverberate in a presidential election that may be decided by the health of the economy. Republicans have urged Mr. Bernanke to refrain from taking additional steps, arguing that the costs were likely to exceed the benefits, while Democrats have pressed for a new round of stimulus.
COMMENT: Of course Republicans don't want anything done. It's just an extension of their no-governance policies AND they don't want a election issue that would hurt their Obama-is-to-blame chant (aka forget history, Republicans were NOT in charge 2000-2008 and did NOT block everything Obama in 2011).
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