Still Some Way To Travel

- "Federal Reserve officials next week are expected to inch closer to the view that a new, more active phase of accommodation is warranted. Although the FOMC may fall short of a consensus for imminent action, the policy statement likely will attempt to keep alive sentiment that renewed expansion of the balance sheet is approaching."
- "Incoming data have prompted a widening consensus that recovery is anemic at a time when financial supports remain uneven at best. We expect second half growth near 1¾% with final demand too slow to spur rising resource use, a key focus of policy concern. The latest small business survey showed that an important segment of the economy continues to lag recovery amid unusually tight credit conditions and a lack of confidence in the outlook."
- "The bond market's favorable reaction to the August Fed announcement should dispel concerns that there would be limited benefit to a new easing effort. Term premiums fell noticeably in the days following the decision to maintain large holdings of longer duration assets. Coupled with an ongoing commitment to low overnight rates, the renewed openness to quantitative measures has for now arrested an untimely deterioration in financial conditions."


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