World stocks jumped to a six-month high, gold hit another record, and the dollar weakened on Wednesday on expectations that the US Federal Reserve will further loosen monetary policy, boosting risk appetite.
The policies of extremely low interest rates maintained by the Federal Reserve and the European Central Bank are plunging the world into chaos instead of helping with the recovery of the global economy, the winner of the Nobel Prize in economics, Joseph Stiglitz, said on Tuesday.
Admitting that employment and output recovery has slowed down in recent months, the US Federal Reserve said on Tuesday that it is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.
The last two years have been quite volatile in financial markets. First, in the fall of 2008, it appeared that the entire global economic system was headed toward inevitable destruction as US financial institutions Bear Stearns, Fannie Mae & Freddie Mac, and Lehman Brothers all collapsed in September of ’08.
The New York Federal Reserve announced Wednesday it will buy about 18 billion US dollars of Treasury debt in nine operations from August 17 through September 13.
The United States Federal Reserve will try to push borrowing costs even lower if the job market continues to languish, Fed Chairman Ben Bernanke said, offering his clearest blueprint yet for possible additional monetary easing.
US Federal Reserve chairman Ben Bernanke has warned that the outlook for the US economy remains “unusually uncertain”. In testimony before the Senate Banking Committee, Mr Bernanke said record low interest rates would still be needed to support economic recovery.
There are no representatives of the banking or financial services industry on the list of chairs and deputy chairs designated by the United States Federal Reserve Monday to serve on the boards of the 12 regional Fed banks for 2011.
The US economy is recovering after the global economic crisis, but consumers and financial institutions remain cautious as weak housing markets, high unemployment, and risks in Europe remain a concern, the IMF staff said in a press conference that followed its annual review of the world’s largest economy.
Lending to small businesses inn the United States is declining, thus making it more difficult to come to grips with the persistent problem of high unemployment, admitted Federal Reserve Chairman Ben Bernanke.