Meeting today: Fed takes fresh stock of economy
WASHINGTON -- Taking fresh stock of economic and financial conditions, Federal Reserve policymakers are considering whether they need to take additional measures to ease the recession.
Most economists are betting there won't be any major announcements Wednesday at the end of a two-day meeting given the Fed's bold $1.2 trillion move just last month to revive the economy.
Still, analysts aren't ruling anything out as credit and financial stresses persist and a new potential danger has arisen to the economy in the form of the swine flu outbreak.
"Never say never with these guys. But I don't think they have a real reason to increase support at this time," said Michael Feroli, economist at JPMorgan Economics.
Fed Chairman Ben Bernanke and his colleagues are all but certain to leave the targeted range for its key bank lending rate between zero and 0.25%.
Economists predict the Fed will hold its key rate at that record-low level well into next year, although some would like to see the Fed provide a more explicit commitment on that front. The Fed has been pledging to hold the rate at super-low levels for "an extended period."
With the Fed's key rate near rock bottom, policymakers will examine the effectiveness of existing programs to help the economy. They also will weigh whether those initiatives need to be changed or expanded, while keeping options open for new relief measures.
The Fed hopes its various efforts will get banks to lend again, lower interest rates and increase Americans' appetites to spend, which would help lift the country out of a recession that began in December 2007.
Some analysts said it's possible — but not likely — the Fed would decide to boost its purchases of government debt beyond the $300 billion announced last month. Others said the Fed might make changes to a consumer lending program that's gotten off to a rocky start in order to make it attractive to investors.
Much hope is riding on the program called the Term Asset-Backed Securities Loan Facility, or TALF. It's been hobbled by rule changes, investor worries about financial privacy and fears that participants might become ensnared in an anti-bailout backlash from the public and Congress. Just $1.7 billion in loans was requested for the second round of funding in April — down from $4.7 billion in March.
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