Federal Reserve 'to tone down assessment of US economy'

9 August 2010

The Federal Reserve will downgrade its assessment of US economic prospects when it meets to discuss the flagging recovery tomorrow (August 10th 2010), it has been predicted.

A conference of the Federal Open Market Committee (FOMC) will look into ways in which its policies can boost growth and help prevent a double dip recession from occurring.

Brian Bethune and Nigel Gault, economists at Global Insight, forecast to the Financial Times: "The FOMC will have to tone down its assessment of the economy in view of recent weak indicators on real growth, real consumption spending and employment."

It is expected by analysts that the Fed will opt to maintain interest rates at their current low target level of between zero and 0.25 per cent.

Earlier this year, Ben Bernanke, the chairman of the Federal Reserve, said that the organization was looking to change its culture so it will be better equipped to deal with a reoccurrence of the financial crisis.

By Gary Cooper

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