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

British Fighters On Frontline of ISIS Information War

It’s estimated that several hundred British citizens are fighting for Islamic State alongside other foreign Jihadists More

Audio Hit Song Delivers Ebola Message in Liberia

'Ebola in Town' has danceable beat, while also delivering serious message about avoiding infection More

Video New Technology Gives Surgeons Unprecedented Views of Patients’ Bodies

Technology offers real-time, interactive, medical visualization and is multi-dimensional More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Native Bees May Help Save Cropsi
X
Deborah Block
August 22, 2014 12:23 AM
U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video Native Bees May Help Save Crops

U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video US Defense Officials Plan for Long-Term Strategy to Contain Islamic State

U.S. defense officials say American air strikes in Iraq have helped deter Islamic State militants for the time being, but that a broad international effort is needed to defeat the extremists permanently. Defense Secretary Chuck Hagel warned Thursday that the group formerly known as the Islamic State in Iraq and the Levant, or ISIL, is better organized, and financially and militarily stronger than any other known terrorist group. Zlatica Hoke has more.
Video

Video Drug-Resistant Malaria Spreads in Southeast Asia

On Thailand’s border with Myanmar, also known as Burma, a malaria research and treatment clinic is stepping up efforts to eliminate a drug-resistant form of the parasite - before it spreads abroad. Steve Sandford reports from Mae Sot, Thailand.
Video

Video Gaza Conflict, Hamas Popularity Challenge Abbas

The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Nigeria's 'Nollywood' Movie Industry Rolls in High Gear

Twenty years after its birth in a video shop in Lagos, Nigeria's "Nollywood" is one of the most prolific film industries on earth. Despite low budgets and whirlwind production schedules, Nigerian films are wildly popular in Africa and industry professionals say they hope, in the future, their films will be as great in quality as they are in quantity. Heather Murdock has more for VOA from Lagos.
Video

Video UN Launches 'Biggest Aid Operation in 30 Years' in Iraq

The United Nations has launched what it describes as one of the biggest aid operations in 30 years in northern Iraq, as hundreds of thousands of refugees flee the extremist Sunni militant group calling itself the Islamic State. As Kurdish and Iraqi forces battle the Sunni insurgents, the fighting has forced more people to flee their homes. Kurdish authorities say the international community must act now to avert a humanitarian catastrophe. Henry Ridgwell reports for VOA from London.
Video

Video Cambodian American Hip Hop Artist Sings of Personal Struggles

A growing underground movement of Cambodian American hip hop artists is rapping about the struggles of living in urban America. Most, if not all of them, are refugees or children of refugees who came to the United States from Cambodia to escape the Khmer Rouge genocide of the 1970s. Through their music, the artists hope to give voice to immigrants who have been struggling quietly for years. Elizabeth Lee reports from Long Beach, California.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.