WASHINGTON (3/15/12)--A Credit Union National Association (CUNA) economist offered some analysis for Bloomberg Business Week about Tuesday's announcement by Federal Reserve Chairman Ben S. Bernanke that additional quantitative easing would be an option, even after he raised his assessment of the U.S. economic expansion.
The Federal Open Market Committee (FOMC), the Fed's policymaking body, met Tuesday and upgraded its outlook for growth, which diminished expectations that the Fed would start a third round of buying bonds, Bloomberg said.
However, the FOMC emphasized in a statement issued after the meeting that the unemployment rate is "elevated" and "significant downside risks" still exist.
Several analysts told Bloomberg that FOMC meetings in April and June would be a prime time for the Fed to take action if more fiscal stimulus is needed.
"They want to keep their powder dry in case they need to take further action later in the year," Bill Hampel, CUNA chief economist, told Bloomberg. "In case they need to do a QE3 [third round of quantitative easing], this is giving them leeway to do it if they think it's necessary later in the year."
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