Fed expected to confirm cash boost for US economy

3 November 2010

The Federal Reserve is expected to reveal a second package of quantitative easing measures later today (November 3rd).

Analysts have predicted that as much as $500 billion will be pumped into the US economy in an attempt to reduce unemployment and kick-start the nation's flagging recovery.

The Fed injected $1.75 trillion into the economy during the downturn and governor Ben Bernanke has hinted at plans for a second round of quantitative easing from the central bank in recent weeks.

Michael Feroli of JP Morgan Chase told BBC News he believes the Fed will announce plans to purchase Treasury securities worth $500 billion over the next six months.

"We expect the statement will express a willingness - but not necessarily a bias - to further increase asset purchases if warranted by economic conditions," he added.

Policymakers at the Bank of England are also set to meet this week and will pay close attention to the Fed's announcement.

By Tony Aynsley

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