Jan 16, 2012

What Will The Federal Reserve Do?

Given the bearish outlook for US economic growth, the Fed can be expected to engage in another round of quantitative easing. But the Fed also faces political constraints, and will do too little, and move too late, to help the economy significantly.

Moreover, a vocal minority on the Fed’s rate-setting Federal Open Market Committee is against further easing. In any case, monetary policy cannot address only liquidity problems – and banks are flush with excess reserves. - in Project Syndicate

Related, Bank Of America (BAC), JP Morgan (JPM), Wells Fargo (WFC), Citigroup (C)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.