Investors Look For Clarity on Fed Spending Question

At the last Federal Open Market Committee meeting, Fed Chairman Ben Bernanke hinted that further spending in the form of quantitative easing had not been ruled out. This triggered a stock sell-off as investors saw the comments as a signal that the Fed was expecting the economy to weaken during the second half of the year. With the FOMC meeting again this week, critics are calling for a forthright discussion on what the Fed has planned for the next six months.

“They (the Federal Reserve) have to do a better job of centering expectations of what ultimately the policy intention is and how will they reach that,” said Duy, an economist at the University of Oregon. “Given that we are in uncharted waters for policy, the risks of getting it wrong will be magnified.”

Source: Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.