Federal Reserve Meeting Preview

The Federal Reserve is in the middle of a two- day conference discussing the health of the current US economy, economic strategy, and its economic forecast. The Fed is expected to release a statement at the conclusion of the meeting at 12:30pm (EST), the economic forecast at 2pm, and Bernanke’s press conference will take place 15 minutes later. Reuters believes the Fed is leaning toward holding steady, despite a tumultuous global economy.

Greece’s recent call for a referendum on the European debt deal erased all hope of progress across the Atlantic, causing the global economy to reel. The US economy which is described as “anemic” by Reuter’s Pedro Nicolaci da Costa, may not be able to endure the global upheaval without taking a downturn itself.

“An ongoing if modest U.S. recovery provides room for the Fed to pause as it mulls offering newly detailed guidance on its policy goals or making another round of asset purchases,” writes Nicolaci da Costa. Marc Chandler, global head of current strategy at Brown Brothers Harriman says, “There is some talk that the Fed will announce renewed mortgage-backed securities purchases, but we are not convinced the Fed is there. Increasing the balance sheet remains an option that the Fed refuses to reject. We expect the option not to be exercised unless there is a material risk of a renewed U.S. economic contraction or that the risks of deflation increase markedly,” according to Reuters.

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