"... Federal Reserve officials face another round of reports projected to show weakening growth amid skepticism they have the firepower to deliver on Chairman Ben S. Bernanke’s pledge to avoid a relapse into recession.
Bernanke, in his Aug. 27 speech to central bankers and economists in Jackson Hole, Wyoming, made his strongest statement yet that the Fed alone can’t keep the recovery going. “Strong and stable” growth will “require appropriate and effective responses from economic policy makers across a wide spectrum” as well as private-sector leaders, he said.
While Bernanke said the Fed’s remaining tools, including asset purchases, will work if needed, some attendees at the annual symposium said during the weekend that the effects of such quantitative-easing measures may be weak or that fiscal policy should play a bigger role. Pressure for action may build this week as economists predict data to show hiring, manufacturing and household purchases cooled further in August.
“There’s now a cost-benefit analysis for future actions which I’d contrast with the ‘whatever it takes’ philosophy of the crisis,” Stanford University Professor John Taylor, creator of an interest-rate formula used by central banks, said in an interview. “The benefits of additional quantitative easing are quite small.” --
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Comment: I'm amazed how things unfold according to the scenario of the Austrian school of economics.
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