News / Economy

US Central Bank May Cut Economic Stimulus

US Central Bank May Cut Economic Stimulusi
X
September 13, 2013 8:20 PM
Investors are watching nervously as the U.S. central bank considers when to reduce its efforts to stimulate the economy. Many economists predict that the cuts will come sometime next year, while others say it might be as soon as next Wednesday. VOA’s Jim Randle reports.
Investors are watching nervously as the U.S. central bank considers when to reduce its efforts to stimulate the economy.  Many economists predict that the cuts will come sometime next year, while others say it might be as soon as next Wednesday. 

Stock prices plunged earlier this year when the U.S. central bank said it might gradually reduce stimulus efforts.

Federal Reserve Board Chairman Ben Bernanke said a strengthening economy would, eventually, no longer needed the boost it got from a huge program of bond purchases.

"If the incoming data support the view that the economy can sustain a reasonable cruising speed, we will ease the pressure on the accelerator by gradually reducing the pace of purchases," he said.

The National Association for Business Economics said its economists saw growth improving this year, rising to a three percent annual rate next year.

The group's survey of its members said stronger growth meant less need for stimulus this year, and made cuts nearly certain next year.

National Defense University Professor Nayantara Hensel designed the survey. “The bulk of our panelists think there is an 80 percent probability that the Fed is going to taper off in 2014,” she said.

The Fed has been trying to boost economic growth since the recession sharply increased unemployment.

First, it cut short-term interest rates to nearly zero and pledged to keep them ultra-low until unemployment falls to 6.5 percent or lower.

Then it created a second program to cut long-term interest rates, making it easier for families to borrow money for new homes and easier for businesses to raise capital for new equipment.

Under the program, the Fed is buying $85 billion in securities each month. So cutting that stimulus would reduce those purchases.
   
Hensel said not all the data supported a cutback. “We are seeing sort of some economic growth, but not as sudden and as significant as one might expect,” she said.

And a survey of the American Institute of Certified Public Accountants showed some members were worried that renewed wrangling over taxes and government spending in Congress could discourage investments needed for growth.
 
Gary Lubin, CEO of Centerphase Solutions, helped organize the survey and spoke to VOA via Skype.

“The debt ceiling, sequestration, issues around patent protection and some international business practices - all really create a certain level of uncertainty which leads to some apprehension or some holding back of items, for example capital spending,” he said.

Top officials of the U.S. Federal Reserve are scheduled to meet next Tuesday and Wednesday for debate on economic policy.  On Wednesday, Bernanke is scheduled to meet with journalists to explain the changes - if any - in the bank’s strategy.

You May Like

N. Korea Sentences American to 6 Years Hard Labor

Matthew Miller's brief trial Sunday comes two weeks after 24-year old Miller and two other American detainees appealed to the US government to help free them More

Pakistan Rejects Afghan Criticism of 480-kilometer Border Trench

Military spokesman tells VOA the project is part of administrative and security measures taken to secure the mountainous border with Afghanistan More

Photogallery Typhoon Kalmaegi Makes Landfall in Philippines

Storm makes landfall late Sunday, cutting power and communications lines and forcing people to flee to higher ground More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Scotland Independence Bid Stokes Global Interesti
X
Henry Ridgwell
September 12, 2014 8:35 PM
The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video Palestinians Turn to Rebuilding Gaza

After almost two months of conflict in Gaza, Palestinians are preparing to rebuild the isolated Mediterranean enclave with assistance from abroad. Meanwhile, an international human rights group has found that Israel likely violated international laws of war during some of its attacks on Gaza. Zlatica Hoke has more.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Middle Eastern Church Leaders Highlight Christians’ Plight

Patriarchs of Eastern Rite churches came to Washington this week to draw attention to the attacks against Christians in Syria, Iraq and elsewhere in the Middle East. VOA’s religion correspondent Jerome Socolovsky has more.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7735
JPY
USD
107.03
GBP
USD
0.6155
CAD
USD
1.1011
INR
USD
60.954

Rates may not be current.