United States Federal open market Committee (FOMC) on Tuesday (June 21) will hold a two-day interest rate meeting, widely speculated, by then it will be officially decided to end on June 30 of US $ 600 billion Treasury purchase program. Outside also speculated, will also be maintained on the expiration of existing securities investment policy to prevent shrinkage on the balance sheet. At the same time, Federal Reserve still expected to maintain the federal funds interest rate target range in 0% per cent.
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United States recent weak local economic data increased outside after the end of QE2 United States concerns economic fate. Meanwhile, the stock market also fell has been 6 weeks in the last 7 weeks. United States unemployment rate up to 9.1%, and United States domestic inflation has reached the highest value since October 2008, which criticized the Federal Reserve.
FAO Economics Robert Brusca, Chief Economist, said: "Bernanke need to economic confidence, he must tell the public everything will improve. "
The of the Economic Outlook Group Bernard Baumohl believes that Bernanke need to express a firm and informed perspective, so that investors be convinced. He said: "I don't think he will like a cheerleader. I think he must be realistic. "
Wells of Scott Anderson Baumohl point of Fargo, he said:" the Bernanke will have to be frank and direct. "
Baumohl, Ben Bernanke will be trying to calm the market, he will tell the market, in the foreseeable future, there will be no fundamental change in policy direction. Baumohl said, while to reach the third round of debt buying obstacles are quite high, but you want to exit the current ultra-loose policy is also very difficult. "Bernanke would make the market convinced the Fed will wait for the time being. "
Baumohl also said, as another step in building confidence, Bernanke need assurance that will establish tighter monitoring of the environment, to prevent any threat to the United States economy appears.
UBS Securities (UBS Securities) Maury Harris said inflation, Bernanke will demonstrate meeting, a bit of a tough attitude than before. This view by many analysts agree.
core CPI5, excluding food and energy prices rose 0.3%, was the largest increase since June 2008. Many people believe that, to the end of this year, core CPI rate rose nearly 2%.
Action Economics Chief Economist Mike Englund said, because the public has been very much dissatisfied about rising energy prices, Bernanke will therefore unlikely to on short-term oil price fell as much as advertised. He said: "we are not for 98 dollars per barrel of oil prices to optimism. ”
Stone & Ray Stone McCarthy Research Associates said he reported the Fed might adopt a formal inflation target is curious. Atlanta reserve President Lockhart (Dennis Lockhart) supports the establishment of an inflation target this month, the authoritative media also reported that the Fed is serious discussion of this proposal. The Wall Street Journal said at this meeting, concrete actions will not be expanded.
at present, fed a fuzzy inflation target of around about 2%.
, Barclays Capital economists said, as the inflation rate in the Federal Reserve continuously to improve the implementation of monetary policy, inflation can also be fed to the outside world that determines its still a way to remain vigilant on inflation.
Stone said that fed the possibility of setting a formal inflation target is less than 50%, but if the Fed really did so, he would not be shocked.
there has been speculation that the meeting, the Fed could lower its economic growth forecasts.
