Can Fed Spur Economic Recovery?

Originally published by: Wells FargoSeptember 23, 2011

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Having already committed to maintaining a low Fed funds rate, policymakers are considering other options and trying out different dance steps to spur recovery. Will a reallocation of the Fed’s holdings of Treasuries and more purchases of MBS spur recovery?

Virulent selling on Wall Street seemed to have been sparked by concerns beyond slow growth in the U.S. economy. Domestic data, while somewhat underwhelming, was not too bad. A slip in housing starts was offset by a gain in permits, existing homes sales jumped, and jobless claims came down slightly.

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