Fed likely to keep rates steady amid crosscurrents
An ugly mix of rising unemployment, foreclosures Spick and gyrating energy prices is plaguing the country and make life difficult for the Federal Reserve Chairman Ben Bernanke, when he tried, the right of l & # 39; economy.
Bernanke and his colleagues dueling Central Bank are confronted with problems: weak economic growth and inflation progresses. For the treatment of risks aggravating the other side. So the Fed is widely expected when you Tuesday to a single key interest rates.
President Bush recently signed the law in Congress ‘housing rescue package. The plan would make it easier for thousands of people at risk of losing their homeland for refinancing in a cheaper, supported by the State mortgage.
The USA central bank now has a number of exceptional measures to facilitate access to credit problems, so that investment banks and others are l & # 39; lending. The free movement of credits is like oxygen for the economy. Without these people find difficult, Big Ticket purchases such as houses and cars and businesses are less inclined to expand and hire workers.
Once inflation increases, it may be difficult for the Fed to break. Inflation is eating into paychecks, whittles away the values of investment and bite into company profits. Paul Volcker, Chairman of the Fed in the years 1980, inflation ‘a handful of raising interest rates at the highest level since the civil war. This approach, however, plunged the country into a painful recession 1981-82.
Source:Yahoo
