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Fed to stick to stimulus as Cyprus rekindles global risks

The federal reserve seems to be as a new crisis in the eurozone, although improving U.S. economic data, warned officials there is risk of the global environment to preserve its $8.5 billion bond-buying stimulus monthly.
It ended a two-day meeting on Wednesday, the U.S. central bank policy making federal open market committee will continue to discuss the potential cost of quantitative easing, including its loose monetary policy, the expansion of the asset market bubbles.
But, Ben Bernanke, federal reserve chairman, Ben Bernanke, has made it clear that he still firmly believes that the benefits are obvious, worth the risk.
"We expect the fed statement the only change is the economy than the federal open market committee see a nod in six weeks ago, said:" Steve blitz, chief economist of ITG.
"Split the nodded, can only aggravate the federal open market committee about whether it gave a hint of commitment, the fed started trailing asset purchase sooner rather than later in the potential for a period of time," he said.
The federal reserve will announce its policy statement, as a new set of economic forecasts, at 2 PM (1800 GMT), Mr Bernanke will have the chance in the first quarter when answering questions from journalists at a news conference, after an hour and a half.
Economic recovery in the United States, one of the important indicators of confidence, lead to employment in February, according to a report of low unemployment, fell by 0.2%, 7.7%, to create 236000 net new jobs.
If this rate can last several months of job growth, the fed might be able to request has been made substantial progress towards improving job prospects - stop bond purchases its own premises.
If any, in Cyprus, where tax on bank deposits, to finance the country's bailout announcement sent through the global financial system, the development of the determination, fed officials may strengthen, to strengthen the American economy.
"Will ensure that this event is that the fed emphasized the importance of the downside of risk prevention, said:" quincy Krosby, market strategy of prudential financial inc. "This ensures that the investor Ben bernanke is to keep its easing stance."
The latest Reuters poll of economists found that they are looking for the fed's current bond-buying program eventually totaled $1 trillion, but many people believe that the pace of the central bank easing at the end of this year to buy. Analysts very big disparity, also saw the potential for a year or two years, the federal reserve stops buying bonds between time, when it started to raise interest rates.
Despite a global problem, the fed has plenty of reasons not to start back also. The preferred measure of inflation continues to run, below the fed's target of 2%, the unemployment rate remained well above pre-recession levels.
"I don't see any signs or policy reasons for the changes of Sonecon, a combination of the economic consulting firm based in Washington, founder and chairman, Shapiro said." josh,. "If anything, would think it may be necessary to enlarge the current policies."
The fed cut benchmark overnight interest rates effectively to zero in 2008, because it operations of the financial crisis. It also bought more than $2.5 trillion in Treasury and mortgage bonds, to maintain the long-term low borrowing costs, in order to stimulate consumption and investment.
Since December, the central bank has said it will keep interest rates close to zero, until the unemployment rate fell to 6.5%, as long as no inflation threat pierced by 2.5%, more than a year or two the horizon - economists expect, to reiterate commitment last Wednesday. The fed also vowed to maintain loose policy even restore process.
Tough talk
Some fed hawks are against the latest round of bond purchases, the reason is worries about future inflation the prospects of the financial turmoil of their worries. In a recent speech, federal reserve governor Jeremy stein, highlight the possibility of, has formed a bubble may be in some areas of corporate bond market.
Stressed that policy makers could eventually remove above its economic stimulus involved may alter the fed's strategy - in discussion, and Ben bernanke is likely to be asked in his press conference.
Officials had plans to sell some assets, the central bank's $3.15 trillion balance sheet, after a period of time, they started to raise interest rates.
But, recently, including Ben bernanke, federal reserve officials, it is strongly recommended that they consider these asset holdings, in part to minimize potential losses, this will force them to stop remittances to the U.S. Treasury Department on a regular basis.


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