News / Economy

Asian, European, Markets Fall, Await Federal Reserve Action

A man talks on his cellular phone at the Australian Stock market in Sydney, August 9, 2011
A man talks on his cellular phone at the Australian Stock market in Sydney, August 9, 2011

Prices fell sharply on key Asian markets Tuesday, while European shares swung from steep losses to some modest gains.  U.S. stocks opened the day higher after Monday's large losses.

Global stock markets have taken some deep losses in volatile trading since a rating agency cut the U.S. government's credit rating one level last Friday.  Concerns about political disputes over spending and the U.S. debt added to worries about the European debt crisis, and fears about the slowing global economy.

With that in mind, many investors are watching closely as top officials of the U.S. central bank gather in Washington to discuss interest rates and other economic policies.

Some economists say the Federal Reserve might try to calm markets by announcing a new effort to stimulate the U.S. economy, which is the world's largest.

While Fed officials have not said what they might do, reports in the financial press speculate they might pledge to hold U.S. interest rates at their current ultra-low level for a long period, or begin another round of bond purchases.  Two previous programs of buying up financial assets were intended to bolster the economy by cutting long-term interest rates.

In the meantime, investors continued to buy U.S. Treasury bonds, seeking the safety of government debt at a time of stock market volatility.  That effectively lowers the price the government must pay to borrow money.

Gold, a traditional safe investment in troubled times, has hit a series of record high prices.  The prices of most other commodities, including oil, fell as investors appeared to expect a slowdown that would cut demand for energy and materials.

U.S. President Barack Obama said he disagrees with the downgrade by the Standard and Poor's rating agency.  He says he hopes it will prompt lawmakers in Washington to agree on a plan to manage Washington's debt and deficit that includes higher taxes for the wealthy and cuts in spending on social programs.  Republicans immediately rejected any tax increases.

S&P Monday defended its decision, saying increasing debt levels in the United States and the inability of Congress and the president to reach political consensus for significant deficit reductions were "no longer comparable with the most highly rated governments."

The other two major credit rating agencies - Moody's and Fitch - have so far kept the U.S. at the highest rating.

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs

World Currencies

EUR
USD
0.8957
JPY
USD
120.93
GBP
USD
0.6393
CAD
USD
1.2199
INR
USD
63.470

Rates may not be current.