The erratic path of the three-year-old US economic recovery will weigh on Federal Reserve policymakers when they gather Wednesday amid a fresh bout of anxiety over the slow pace of revival.
The Fed’s interest rate-setting panel will end two days of meetings in Washington to decide whether more stimulus for the spluttering economy is warranted.
While Fed Chairman Ben Bernanke has sounded more positive about the state of the economy in recent weeks, high gasoline prices, slowing job growth and Europe’s debt problems will raise Fed fears of another springtime stumble.
In recent years the US recovery has stalled heading into summer due to Middle East revolutions, European debt crises and Japanese earthquakes.
With that burned into the collective conscience, US economists, policymakers and Wall Street have recently exhibited the kind of self-doubt normally seen in awkward teenagers.
There has been “a recurring and almost maddening ‘stop-go’ pattern to this recovery — stronger pulses followed by lulls,” said Joshua Feinman, chief global economist for DB Advisors.
“There does seem to be an underlying improvement in the US economy, albeit a modest and erratic one, very much of the ‘two steps forward, one step back’ variety.”
The latest significant setback came with March unemployment figures, which showed the unemployment rate dropping to 8.2 percent but the economy creating a meager 120,000 jobs.
That puts the Fed in a difficult spot.
Shorn of the ability to cut interest rates further — they are already at close to zero — the Fed will have to decide whether or not to increase controversial asset purchases.
The bond and security buying was designed to lower real interest rates, prop up prices and fuel growth-engendering borrowing.
But many inside the Fed remain concerned the measures, know to economists as quantitative easing, will fuel inflation.
Outside the Fed, emerging market countries have complained that the moves weaken the dollar, making US exports unfairly cheap.
They are “paying a high price” for loose monetary policies of advanced economies, Brazil’s Finance Minister Guido Mantega said on Friday.
Faced with a moderate, if uncertain, economic outlook, and good reasons not to push ahead with new stimulus, the Fed is expected to keep what measures it has in place and be prepared to move should things improve or worsen.
“Despite some choppiness in the monthly data, several measures of activity have grown at a solid pace in Q1. An outlook of continued modest growth will likely be sufficient to keep the Fed in ‘wait and see’ mode,” said Peter Newland, an economist at Barclays.
Absent any surprise shift by the Fed, investors will look more closely at the central bank’s economic forecasts and whether it alters its expectation that rates will not rise until late 2014.
“The committee’s statement, Bernanke’s press conference and updated forecasts will be sifted for clues about future policy,” said Nigel Gault of IHS Global Insight.
[Federal reserve system symbol via Shutterstock.com]
Rosh Hashanah services interrupted by death of the first Jewish woman on the Supreme Court
The death of the first Jewish woman on the U.S. Supreme Court interrupted Rosh Hashanah services on Friday evening.
"On Friday, Jewish people around the country celebrating Rosh Hashanah were stunned to learn that Supreme Court Justice Ruth Bader Ginsburg, a prominent member of their own tribe, had died," the HuffPost reported. "People received alerts, Zoom messages and announcements from their rabbis about Ginsburg Friday night."
While many people were saddened by the passing of the iconic jurist, Twitter user Leora Horwitz noted a silver lining.
‘Big mistake’: Trump’s favorite pollster tells Fox News why Republicans shouldn’t push nomination before the election
Fox News on Friday examined why it would be a "big mistake" for Republicans to attempt to force through a nominee to replace Justice Ruth Bader Ginsburg on the Supreme Court.
Following Ginsburg's death, Senate Majority Leader Mitch McConnell (R-KY) vowed that Trump's nominee would receive a vote, but did not specify whether it would occur before the election or during the "lame duck" session of Congress that occurs before the 2020 election victors are sworn in.
But conservative pollster Scott Rasmussen warned Republicans it would be a bad idea during an appearance with Fox News personality Laura Ingraham.
LISTEN: Mourners sing ‘Amazing Grace’ outside the Supreme Court to celebrate Ruth Bader Ginsburg
Heartwarming videos were shared on social media on Friday night showing the spontaneous gathering at the Supreme Court following the death of Justice Ruth Bader Ginsburg.
The large crowd, with many people wearing masks, sang the hymn "Amazing Grace."
Here are some of the videos of the scene:
A moving moments as dozens join in to sing “Amazing Grace” on the steps of the Supreme Court. pic.twitter.com/NGZyZi4YR4
— Mike Balsamo (@MikeBalsamo1) September 19, 2020