Economy, Federal Reserve | featured news

The Federal Reserve looks set to embark on a hotly debated second round of monetary easing next week, but much uncertainty surrounds the scope and pace of bond purchases by the U.S. central bank.

The simple truth is that Obama and the Democratic Congress were dealt a lousy economic hand, and they've played it about as well as anyone could. Along with their predecessors and the holdovers at the Federal Reserve, they prevented a collapse of the global financial system and a 1930s-like depression. But given the magnitude of the financial crisis and the global imbalances that gave rise to it, a prolonged period of slow growth and high unemployment was almost inevitable.

Federal Reserve Chairman Ben S. Bernanke on Friday laid out a case for the central bank to take further action to bolster growth, citing the risks of prolonged high unemployment and a U.S. economy slipping into a deflationary spiral.

Stocks rallied Wednesday as investors continue to anticipate more stimulus measures from the Federal Reserve.

The Federal Reserve board said that it would use the proceeds from its huge mortgage-bond portfolio to buy long-term Treasury securities.

Unemployment is likely to stay high for a long time, two Federal Reserve officials said on Wednesday, suggesting the U.S. central bank is in no rush to raise its ultra-low interest-rate policy.

To sustain the fragile economic rebound, the Federal Reserve is sure to leave interest rates at record lows and is likely to repeat a pledge to keep them there for a while.

The Federal Reserve sounded a more confident note Wednesday that the economy is strengthening but pledged to hold rates at record lows to make sure it gains traction.

The stock market continued its advance of the past month after the Fed said it would keep interest rates low to revive the economy.

The increase in the discount rate is seen as a first step by the Fed to normalize lending after more than two years of extraordinary actions to prop up the economy.