By TraderVox.com
Tradervox.com (Dublin) – After a positive S&P/Case Shiller HPI data showed an increase of 2.2 percent in May from April, most economists are of the opinion that the FOMC meeting which started today will vote to delay the asset-purchases program which has been predicted as the solution to the US slowing growth. According to a survey conducted by one of the leading forex companies, investors in the market are projecting that the Federal Reserve Chairman will not announce a third round of quantitative easing this week and might wait until September to do so.
Economists are of the opinion that the Federal Open Market Committee will delay in making such a decision as they wait to see data from the job market. If there is not sustained progress in this sector and the unemployment rate remains above 8 percent, then the committee will probably announce another round of asset purchases. These comments were shared by Michael Gapen who is a senior US economist in New York at Barclays Plc. He also indicated that the Fed is not under pressure to act immediately as the economy has grown by 1.5 percent for the second quarter and the financial market have not weakened as much. Most economists are expecting the Fed to extend its commitment to hold interest rates near zero beyond the late 2014 horizon, instead of additional stimulus.
According to Paul Edelstein who is a Director of Financial Economics at HIS Global Insight in Massachusetts, there are no signs that the Fed is under pressure to act and choosing to wait until September will give the FOMC a chance to guide the market as it provides an outlook for the US economy. The FOMC is expected to keep a close eye on the Labor Department reports to be released on August 3.
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