An important week for economic policy

Eyes on the Federal Reserve

This week is an important one for economic policy-makers.  They will be looking at what the US Federal Reserve decides to do mid week.  The general expectation is that the Fed will restart quantitative easing - printing money - to help stimulate the US economy.  However no one knows what, if anything, will be announced nor how markets and the economy will react.  But the decision is an important one.  If it works it may be positive for the US economy but a new QE programme may also indicate that the Fed believes the economic outlook without it would be grim.

This is not just a passing interest for us here in the UK.  Not only does the US economy have a major impact on the world economy, but in the UK the Bank of England is debating whether to restart its own QE programme.  The Coalition's economic policies rely on not only a pick-up in investment and exports in the private sector but also on a move by the Bank should the growth outlook disappoint.

Stephen Beer, 01/11/2010

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