News / Economy

Central Bank to Weigh Further Stimulus Measures

Federal Reserve Board Chairman Ben Bernanke on Capitol Hill, Washington, June 7, 2012.
Federal Reserve Board Chairman Ben Bernanke on Capitol Hill, Washington, June 7, 2012.
Ken Bredemeier
Policymakers at the U.S. Federal Reserve, the nation's central bank, may be set to take new action to spur the nation's sluggish economy as they meet on Wednesday and Thursday to decide whether to adopt new policies to rally growth.

The world's largest economic, still struggling to recover from the recession of 2008, the nation's worst since the Great Depression, advanced just 1.7 percent in the April-to-June period compared to the early part of 2012. Job growth has languished, with the Bureau of Labor Statistics reporting last week that relatively few jobs were added in August — only 96,000. More than 12-million people are out of work, and last month 368,000 Americans left the workforce, abandoning their search for new jobs.

According to economics professor Steve Fazzari of Washington University in St. Louis, the economy is having a hard time advancing from the recession.

"We’re still stagnating. We’re not creating enough jobs in the economy to even keep up with population growth. So, yes, we are growing, rather than shrinking ... but we’re not really doing any kind of catch-up here," he said. "We lost so many jobs in 2008 and 2009, and we’re just rumbling along the bottom, as far I’m concerned."

Related Report by Mil Arcega

The central bank has already bought $3 trillion worth of various types of securities during the last four years to put more money into the economy. Policymakers hoped that, in turn, banks across the country would then make more loans to businesses to hire more workers, and to consumers to spend more on products they need or want.

But the economy is still lagging, and Federal Reserve Chairman Ben Bernanke said last month that the meager job growth is of particular concern, suggesting that the Fed could take new action to boost the economy.

But the type and scope of any central bank action is unknown. The central bank could buy more bonds — perhaps securities backed by home loans — or extend the period for keeping its benchmark interest rate at zero to a quarter of 1 percent beyond the late 2014 date it has already set.

In light of last week's employment report, Fazzari says he expects the central bank to seek to push already low long-term interest rates even lower.

Finance professor Rebel Cole of DePaul University in Chicago says the weak job growth indicates a better than 50-50 chance that the Federal Reserve will adopt new economic policies. But whether the central bank's buying of home-loan securities would boost the labor market, he says, remains uncertain.

“The problem with that is that I don’t think that mortgage rates are too high," he said. "I don’t see how that’s really going to help the job market.”

Moreover, Cole says Americans looking to buy a home face stringent reviews of their personal finances, making home-buying even more difficult.

“Most people who can refinance have refinanced," he said. "The problem in the housing market is not that people can’t afford the mortgage rates, but they can’t qualify for the mortgage because 25 percent are underwater, meaning that the borrower owes more on the mortgage than the home is worth. Underwriting of mortgages has tightened considerably in the last couple years. It’s very, very difficult to qualify for a mortgage unless you have absolutely sterling credit.”

Whether Federal Reserve policymakers decide to adopt new policies — or take no action — is sure to reverberate across the U.S. political landscape, where the state of economy has been the central issue this year's presidential campaigns. President Barack Obama, a Democrat, and his Republican challenger, Mitt Romney, trade barbs almost daily about who can best push the economy ahead at a much faster pace.

You May Like

Video Genome Initiative Urgently Works to Freeze DNA Before Species Go Extinct

Smithsonian senior research botanist Vicki Funk says ultimate goal is 'trying to get one-half of the diversity of plant life on Earth at the genus level in two years' More

Video Russia Accused of Abusing Interpol to Pursue Opponents

Report from member of British think tank says Russian extradition requests keep targets from traveling More

US Lawmakers Weigh Turkish Anti-terror Moves

Turkey’s two-pronged campaign against Islamic State militants, Kurdish PKK forces provokes mixed reactions on Capitol Hill More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Russia Accused of Abusing Interpol to Pursue Opponentsi
X
Henry Ridgwell
July 28, 2015 9:53 PM
A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video Special Olympics Athletes Meet International Friends

The Special Olympics are underway in Los Angeles, California, with athletes from 165 countries participating in an event that gives people with intellectual disabilities the chance to take part in an international competition. VOA's Mike O'Sullivan reports that for athletes and their families, it's also an opportunity to make new friends in an international setting.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Iran Nuclear Pact Wins Few New US Congressional Backers

Later this week, President Barack Obama returns from a trip to Africa to confront a U.S. Congress roiled by the nuclear accord with Iran, an agreement that has received the blessing of the U.N. Security Council. Days of intensive lobbying and testimony by top administration officials have won few new congressional supporters of the pact. VOA’s Michael Bowman reports.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video Critics of Japan Defense Policy Focus on Okinawa

In Okinawa, many locals have long complained that Tokyo places an unfair burden on the tiny island by locating most of Japan's U.S. military bases there. As Japan's government moves toward strengthening and expanding the country's defense policies, opponents of those plans are joining local protesters in Okinawa, voicing concern about where the country is headed. VOA’s Brian Padden reports from Okinawa.
Video

Video IS Uses Chemical Weapons in Syrian Attack

Islamic State militants have added a new weapon in their arsenal of fear: chemical weapons. VOA Kurdish service reporter Zana Omer was on the scene within hours of a recent attack in Hasakah, Syria, and has details of the subsequent investigation, in this report narrated by Miguel Amaya.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.

VOA Blogs

World Currencies

EUR
USD
0.9043
JPY
USD
123.19
GBP
USD
0.6445
CAD
USD
1.3030
INR
USD
64.170

Rates may not be current.