Fed expected to reveal plans to boost economy
by Pallavi Gogoi, Christina Rexrode and Bernard Condon
Associated Press Writers
September 10, 2012 12:47 AM | 514 views | 0 0 comments | 3 3 recommendations | email to a friend | print
NEW YORK — Will the stock market get more ammunition from central banks to go higher?

We will find out next week when Federal Reserve officials meet. They are widely expected to announce steps to prop up the ailing U.S. economy.

Any Fed action will come on the heels of Thursday’s bold program from the European Central Bank, which said it would buy bonds from countries such as Italy and Spain to ease their financial pressures and buy time to reduce their debt and reform their economies.

The Standard & Poor’s 500 index is up 14 percent this year. That’s thanks in no small measure to expectations building that the Fed will act. Friday’s tepid unemployment report provides the Fed with even more reason to act.

The Labor Department said employers added 96,000 jobs in August, fewer than experts had expected and the latest sign of weakness in the economy and poor prospects for the unemployed. Construction and manufacturing are also slowing.

Many now expect the Fed to unveil a new bond-buying program at its meeting next week. The goal would be to lower long-term interest rates and encourage borrowing and spending.

While that may set off another rally in the stock market, strategists and experts question how much of a long-term effect it would have on the economy since interest rates are already so low.
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