News / Economy

US Economists: Fed Will Cut Economic Stimulus

Trader Christopher Morie, right, works on the floor of the New York Stock Exchange Monday, Sept. 16, 2013. U.S. stocks and bonds are rising sharply in early trading after former Treasury Secretary Larry Summers withdrew from the race to become head of the
Trader Christopher Morie, right, works on the floor of the New York Stock Exchange Monday, Sept. 16, 2013. U.S. stocks and bonds are rising sharply in early trading after former Treasury Secretary Larry Summers withdrew from the race to become head of the
VOA News
U.S. economists are predicting that policy makers at Federal Reserve are on the verge of beginning to trim the economic stimulus measures they have used to boost the American economy from the depths of the 2009 recession.

Top officials of the U.S. central bank started a two-day meeting Tuesday in Washington to decide whether to reduce their $85-billion-a-month purchase of securities to pump more money into the economy. One leading American economist, Jim O'Sullivan of High Frequency Economics, said he expects the Fed to cut the asset purchases by $10 billion a month.

"All signs at this point suggest that they will start tapering, and start winding down the purchase program. Of course, right now they're buying $85 billion per month in securities, so they'll start pulling that number down, probably not by a huge amount," said O'Sullivan. "I'm guessing they'll clip it to maybe $75 billion a month from $85 billion. So they're certainly not tightening at this point, but they're going to at least slow down the rate of easing."

Another economist, Mark Vitner of the large Wells Fargo Bank, said the U.S. economy, the world's largest, is advancing, even if it is not fully recovered from the country's worst economic downturn since the Great Depression of the 1930s. He said that with improvement in the economy, the central bank is looking to shrink its role as a spur to economic growth.

"I think they very much want to begin to normalize monetary policy. And right now it's exceptionally easy, even though the economy, you have a hard time saying that it's exceptionally weak. It's not strong, not strong by any stretch of the imagination, but it's strengthening, and it's moving in the right direction. It's time that monetary policy begins to do the same thing," said Vitner.

Even with the improvement of the U.S. economy, job growth has been sluggish in recent months, and some workers have given up their search for employment. The country's jobless rate has dipped to 7.3 percent - the lowest since late 2008, but still well above the historical norm of less than 6 percent.

The country's stock markets have recovered  from the recession, though, with major indexes near all-time highs. Major corporations have been reporting hefty profits.

The Fed plans to announce any policy changes on Wednesday.

You May Like

Turkish Public Fears Jihadists More Than Kurds

Turkey facing twin threats of terrorism by Islamic State and PKK Kurdish separatists, says President Erdogan’s ruling AK Party More

Video One Year After Massacre, Iraq’s Yazidis a Broken People

Minority community still recovering from devastating assault by IS militants which spurred massive outrage More

‘Malvertisements’ Undermine Internet Trust

Hackers increasingly prey on users' trust of major websites to delivery malicious software 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.
Iraqi Yazidis Fear Death of Their Communityi
X
Sharon Behn
August 03, 2015 2:23 PM
A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs

World Currencies

EUR
USD
0.9118
JPY
USD
124.31
GBP
USD
0.6420
CAD
USD
1.3048
INR
USD
64.136

Rates may not be current.