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Fed takes action despite Republican opposition

Business Times - 23 Sep 2011


Fed takes action despite Republican opposition

By LEON HADAR
WASHINGTON CORRESPONDENT

ALL signs are suggesting the recovery of the United States economy has been slowing and may be even coming to a halt: the unemployment rate is hovering around 9 per cent; consumer and business confidence is continuing to fall; a political stalemate over fiscal policy in Washington has already brought about a US credit downgrade; and the sovereign debt crisis in Europe is making things worse.

All these problems have put pressure on the US Federal Reserve to do something about the American economy and prevent it from experiencing the dreaded double-dip recession.

Indeed, the International Monetary Fund (IMF) warned that the US could slip back into recession without further fiscal and monetary stimulation. So the Fed will try once again to stimulate the weak economy - that grew at an annual rate of less than one per cent over the first half of the year - by using another monetary…