News / USA

US Central Bank to Try to Boost Economy

US central bank poised to start pumping hundreds of billions of dollars into American marketplace in hopes of boosting sluggish economy

Federal Reserve chairman Ben Bernanke addresses a Federal Reserve conference, in Boston, 15 Oct 2010
Federal Reserve chairman Ben Bernanke addresses a Federal Reserve conference, in Boston, 15 Oct 2010

The U.S. central bank is poised to start pumping hundreds of billions of dollars into the American marketplace this week in hopes of boosting the nation's sluggish economy.

The Federal Reserve's policy-setting committee is meeting Tuesday.  Economic analysts say that by Wednesday they expect the central bank will approve a plan to buy $500 billion or more in U.S. government securities over a period of several months.

The idea behind the plan by Federal Reserve chairman Ben Bernanke is that the purchase of the securities will put downward pressure on long-term interest rates paid by businesses and consumers to borrow money.

That in turn could make it easier for consumers to increase spending, and for businesses to hire more workers.  Almost one in every 10 U.S. workers is unemployed, or about 15 million jobless overall.

Critics say the Bernanke plan, virtually unprecedented in the Federal Reserve's policy-making role, might not have much effect on the U.S. economy.  In addition, some analysts fear that pumping more money into the world's largest economy might be an over-reaction that could lead to long-term inflation.

Interest rates paid by businesses and consumers when they borrow money to buy homes are already at very low rates.  But such low interest rates have not spurred significant economic growth in the U.S., even though the recession officially has been over since June 2009.  

In the July-to-September period, the U.S. economy grew at a 2 percent annual rate, slightly more than the 1.7-percent expansion in the previous three months.  But economists think that 3 percent growth is needed over a period of time before businesses would start hiring significant numbers of new workers.

In 2009, in the midst of the recession, the Federal Reserve bought $1.7 trillion in mortgage and treasury bonds.  With the economy now growing modestly, analysts are predicting that the new purchase of securities might total at least $500 billion.  By purchasing securities gradually, the central bank could review that action's effect on the economy before adopting other measures.

The two-day meeting of the Federal Reserve's policy-setting group, the Open Market Committee, begins on the same day as U.S. congressional elections, choosing all 435 members of the House of Representatives and filling 37 seats in the 100-member Senate.  Opinion polls indicate that opposition Republicans are likely to regain control of the House and take seats from the majority Democrats in the Senate.

Republican control of even one of the congressional chambers could lead to further contentious debate over U.S. economic policy with President Barack Obama, a Democrat who does not face re-election until 2012.

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

You May Like

US Investors Eye IPO for China's Alibaba

E-commerce giant handled 80 percent of China's online business last year, logging more Internet transactions than US-based Amazon.com and eBay combined More

Video Uneasy Calm Settles Over Israel, Gaza Strip

As cease-fire begins, Palestinians celebrate in streets; Israelis remain wary More

Video Chinese Doctors Use 3-D Spinal Implant

In treatment of a 12-year-old boy Chinese doctors used a 3-D printer and special software to create an exact replica of vertebra 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.
Chinese Doctors Use 3-D Spinal Implanti
X
August 27, 2014 4:53 PM
A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. VOA News reports from Kolkata.
Video

Video Northern California Quake: No Way to Know When Next One Will Hit

A magnitude 6.0 earthquake rocked northern California’s Napa Valley on Sunday. Roads twisted and water mains burst. It was the wine country’s most severe quake in 15 years, and while hospitals treated many people, no one was killed. Arash Arabasadi has more from Washington on what the future may hold for those residents living on a fault line.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.

AppleAndroid