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Wednesday, July 18, 2012

Strong Possibility of Further Fed Easing by September: Goldman

Goldman Sachs Headquarters, New York City
Goldman Sachs Headquarters, New York City (Photo credit: Wikipedia)
The Federal Reserve could ease monetary policy in August or September, although a large move is more likely to come only after the November elections, a Goldman Sachs report said. In a testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke offered no new hints that the central bank is planning more easing, but repeated a pledge that the Fed “is prepared to take further action as appropriate to promote stronger economic recovery.” “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deterioration in the already-cautious near term Fed economic outlook,” Goldman Sachs [GS  97.98    0.30  (+0.31%)   ] economist Andrew Tilton said in a report. Tilton said that the lack of inclusion of easing options in Bernanke’s prepared testimony suggested a lower probability of a big easing step at the August monetary policy meeting. Extending the current guidance that rates will remain “exceptionally low…at least through late 2014” appears the path of least resistance should the Fed decide to ease policy in August or September, the report said. ... Continue to read.
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