Showing posts from January 5, 2011

Will US Fed change direction soon?

Business Times - 06 Jan 2011 Will US Fed change direction soon? Pressure from the new Congress and the changing composition of the Fed could put paid to loose monetary policy By LEON HADAR WASHINGTON CORRESPONDENT THE Republican electoral wins in last year's midterm congressional elections and the new appointments to the US Federal Reserve's policy-making body, the Federal Open Market Committee - coupled with signs of accelerated economic recovery - have ignited speculation that Fed chairman Ben Bernanke will be forced to reassess the central bank's loose monetary policy. It is being said that he will bring to an end its earlier decision to purchase billions more in Treasury bonds - otherwise known as quantitative easing (QE). In a way, in response to the financial crisis and the ensuing Great Recession, the Federal Reserve has been pursuing what some consider to be the most relaxed monetary policy in its history. In fact, the Fed is currently managing a balance sheet in ex