Following a disappointing July jobs report, the Federal Reserve is under pressure to stimulate economic growth. At their Aug. 10 meeting, officials likely will debate whether to hold down short-term interest rates for the long term or use proceeds from mortgage-backed securities investments to buy a small amount of government debt to lower long-term interest rates; but analysts say the impact of such moves would be minimal.
While the Fed could restart programs to purchase MBS and government debt on a large scale to boost growth, there is concern that a Wall Street sell-off could occur if investors panic.
Source: Associated Press, Jeannine Aversa (08/10/10)
© Copyright 2010 Information Inc.