News / USA

US Central Bank Mulls Action as Lawmakers Weigh In

Investors are waiting to see what action, if any, the U.S. central bank might take to spark the country's struggling economy.

The U.S. Federal Reserve concludes a two-day meeting Wednesday, with many economists predicting the bank's policy board will move to further lower borrowing rates in an effort to spur growth.  But leading Republican lawmakers have taken the unusual step of writing a letter to the Fed, urging the central bank to do nothing.

The letter, signed by House Speaker John Boehner and Senate Minority Leader Mitch McConnell, warned the central bank to "resist further extraordinary intervention," saying such moves had yet to help boost the economy.  They also warned new action could do "further harm."

A leading Democratic senator, Charles Schumer, criticized the letter, accusing Republicans of meddling in the central bank's affairs.

Federal Reserve Chairman Ben Bernanke has repeatedly said the central bank still has ways to help spark economic growth.  But the Fed's board of governors has been divided over whether to make any moves.

The U.S. economic recovery has been uneven as many Americans struggle to find work.  The unemployment rate is at 9.1 and has hovered above 9 percent for months.

Other key sectors of the economy, like the housing market, are also facing difficulties.

A report released Wednesday by the National Association of Realtors said sales of previously owned homes rose 7.7 percent in August, from the previous month.  But the trade group's report also said sales were driven by investors buying foreclosed homes.

The Fed has tried to spark the economy, and home sales, by lowering its benchmark lending rate to an all-time low of zero to one-quarter of a percent.

Many economists believe the Fed is considering a policy known as "Operation Twist."   The policy calls for selling short-term securities in its $1.7 trillion portfolio to buy longer-term holdings.  The goal of such a move would be to lower yields on U.S. Treasury bonds in the hopes of driving down consumer borrowing rates.

The U.S. Federal Reserve is set up as an independent decision-making entity.  Fed Chairman Ben Bernanke is a Republican and was first appointed by Republican President George W. Bush.  He was then renominated by Democratic President Barack Obama.

Some information for this report was provided by AP, AFP and Reuters.

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