Investors Await US Central Bank Decisions

Posted August 1st, 2012 at 12:55 pm (UTC-5)
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Investors worldwide are watching U.S. central bank policy makers Wednesday to see whether they take new action to try to boost the sluggish American economy.

Officials at the Federal Reserve were set to give their assessment of the world's largest economy after poring over economic trends at a two-day meeting. But economists surveyed by financial news agencies in the U.S. predicted the central bank would refrain from offering new stimulus measures.

Instead, they predicted officials would wait for more economic data before again considering action at its September meeting. The U.S. government is set to release unemployment and job-growth numbers for July on Friday.

The question for the fiscal policy makers is whether the U.S. economy needs an immediate new jolt. The American economy slowed in the April-to-June period, growing only at a 1.5 percent pace, while the country's jobless rate has remained agonizingly high at above 8 percent for 41 straight months.

Meanwhile, at a re-election campaign rally in Ohio, President Barack Obama acknowledged the economic difficulties Americans have faced in the country's worst downturn since the 1930s.

“Our first order of business is to recover all the jobs and wealth that was lost in the crisis, and we've made strides these last three and a half years to get that done. But, beyond that, we're here to reclaim the financial security that's been slipping away for more than a decade. The decade before I came into office your incomes and wages generally weren't going up. Jobs were moving overseas. Auto industry had been getting hammered. So our job is not just to put people back to work, it's also to build an economy where over the long haul that work pays off, so that no matter who you are, or what you look like, or where you come from, here in America you can make it if you try.”

Mr. Obama's expected opponent in the November election, Republican candidate Mitt Romney, has made the U.S. economic struggles the centerpiece of his campaign. The former Massachusetts governor and one-time venture capitalist says Mr. Obama's policies have failed. Romney says lower taxes and less government regulation would boost the economy and create jobs at a faster pace.

On Thursday, policy chiefs at the European Central Bank are to consider new ways to attack the 17-nation euro currency zone's persistent governmental debt crisis, now in its third year. The central bank could opt to directly buy Spanish and Italian government bonds as a way to ease their borrowing costs.