Forum Post: Is the FED trying to "create jobs" or protecting investors by supporting artificial prices indexes?
Posted 8 months ago on Sept. 7, 2012, 3:42 p.m. EST by richardkentgates
from Fort Walton Beach, FL
This content is user submitted and not an official statement
The FED looks like they are going to once again rally the markets and stabilize stock prices with another round of Quantitative Easing which is a disincentive for the downward adjustment of prices that usually takes place during periods low demand. Not to mention devaluing of the dollar by engaging in these fresh cash give-aways. Giving WallSt more money has no track record of creating jobs.
Now the news
Jobs report likely to force Bernanke's hand
A weak August jobs report signaled hiring continues to slog along at a snail's pace, giving the Federal Reserve even more reason to enact more stimulative measures -- possibly as soon as next week.
The economy added just 96,000 jobs in August. And even though the unemployment rate dipped to 8.1% from 8.3% in July, any number above 8% is still uncomfortably high for the Fed. (Inflation, on the other hand, is comfortably below the Fed's target for 2% a year.)
In a speech in Jackson Hole, Wyo. last week, Ben Bernanke characterized the weak job market as a "grave concern" causing "enormous suffering and waste of human talent" -- one of the strongest statements yet from the Fed chairman.
Bernanke has defended the Fed's efforts so far, including two rounds of large-scale asset purchases known as quantitative easing. Options for more easing could include a third round of asset purchases, nicknamed QE3, or extended guidance on low interest rates. The Fed currently forecasts interest rates will remain "exceptionally low" until late 2014.
Earlier this year, the central bank had pledged to provide more stimulus only if the economy weakened further. Recently that language changed to say the Fed "will act" if the economy merely stays the same.
For the Fed's outlook to change, it would have needed to see a major, sudden improvement – say 300,000 jobs in one month, said Alan Blinder, a Princeton University economist and former Federal Reserve governor. The economy needs about 150,000 jobs a month just to keep up with population growth.
That didn't happen. Making matters worse, the job gains for June and July were revised lower. The Fed's policy-making team meets for two days next week, and Bernanke will discuss their latest decision in a press conference on Thursday afternoon.
Several economists and market experts, including bond king Bill Gross of Pimco, were quick to chime in on Twitter about how the jobs numbers make some move by the Fed far more likely next week.