Fed in rescue bid on fears over growth

first_img KCS-content Share Tags: NULL THE US Federal Reserve confirmed fears of a marked slowdown in the world’s biggest economy yesterday as it made its first step towards extending its emergency monetary policy regime in a significant policy shift. The central bank said it would reinvest proceeds from its investments in mortgage-backed securities to buy longer-term government debt in a bid to help the faltering economy by keeping mortgage and corporate loan rates lower.The move, dubbed a “light” version of quantitative easing (QE) by economists, means the Fed will pump the estimated $200m to $300m proceeds from its first $1.2 trillion QE cycle into Treasury bonds, while maintaining its balance sheet at close to its present $2.06 trillion, rather than gradually allowing it to run down. The decision is an abrupt U-turn by Fed chairman Ben Bernanke, who just last month said he was not planning specific new measures to support the economy. But yesterday’s statement forecast a more gloomy outlook for the economy with Fed officials saying the “pace of recovery in output and employment has slowed in recent months”. When it last met in June, it said the recovery was “proceeding” at a “moderate pace”. The Fed also reassured markets that it would keep rates on hold at 0 per cent to 0.25 per cent for an “extended period”.Capital Economics analyst Paul Ashworth said the policy change was a “largely symbolic gesture, designed to reassure markets.The Dow Jones, which fell by 100 points earlier, narrowed its loss within minutes of the committee’s statement eventually closing 54.5 points lower at 10,644.25. The Fed’s move came as official data showed US business productivity fell for the first time in one and a half years in the second quarter. whatsapp More From Our Partners UK teen died on school trip after teachers allegedly refused her pleasnypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgWhy people are finding dryer sheets in their mailboxesnypost.comRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comI blew off Adam Sandler 22 years ago — and it’s my biggest regretnypost.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgFeds seized 18 devices from Rudy Giuliani and his employees in April raidnypost.com980-foot skyscraper sways in China, prompting panic and evacuationsnypost.comInside Ashton Kutcher and Mila Kunis’ not-so-average farmhouse estatenypost.comBiden received funds from top Russia lobbyist before Nord Stream 2 giveawaynypost.comMark Eaton, former NBA All-Star, dead at 64nypost.com‘Neighbor from hell’ faces new charges after scaring off home buyersnypost.comKiller drone ‘hunted down a human target’ without being told tonypost.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comSupermodel Anne Vyalitsyna claims income drop, pushes for child supportnypost.comcenter_img Tuesday 10 August 2010 9:00 pm Fed in rescue bid on fears over growth by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailNoteabley25 Funny Notes Written By StrangersNoteableyZen HeraldThe Truth About Why ’40s Actor John Wayne Didn’t Serve In WWII Has Come To LightZen HeraldBetterBe20 Stunning Female AthletesBetterBeautooverload.comDeclassified Vietnam War Photos The Public Wasn’t Meant To Seeautooverload.comAtlantic MirrorA Kilimanjaro Discovery Has Proved This About The BibleAtlantic MirrorTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastElite HeraldKate Middleton Dropped An Unexpected Baby BombshellElite HeraldTrading BlvdThis Picture of Prince Harry & Father at The Same Age Will Shock YouTrading Blvd Show Comments ▼ whatsapplast_img

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