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US Federal Reserve's Ben Bernanke to face press

Category: Business

Published: 27th Apr 2011 16:56:17

The Federal Reserve will reveal its latest interest rate decision later, before chairman Ben Bernanke holds his first press conference.

Mr Bernanke will outline the views of central bank's board members on rates as well as give his overall outlook for the US economy.

He is also likely to give an indication of when the bank will begin withdrawing its monetary stimulus.

Investors around the world will be watching his words closely.

The market is expecting rates to remain at a record low of zero to 0.25%, where they have been since December 2008.

Mr Bernanke is also likely to stress the need to withdraw the Fed's support to the US economy, through a policy known as quantitative easing, in a slow and orderly manner.

The introduction of regular press conferences by the chairman of the Fed is seen as a way for the bank to address directly criticisms of its handling of the financial crisis, and even its inability to prevent it in the first place.

The US economy grew by an annualised rate of 3.1% in the final three months of last year, but some economists expect the rate of growth to have slowed in the first quarter of this year.

The January to March GDP figures are published on Thursday.

The US unemployment rate is also falling, and hit a two-year low of 8.8% in March. However, inflation jumped sharply last month to 2.7%, largely due to big rises in food and petrol prices.

This mixed picture means the Fed is unlikely to raise rates, which could undermine the country's economic recovery.

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BBC News, 2011. US Federal Reserve's Ben Bernanke to face press [Online] (Updated 27th Apr 2011)
Available at: http://www.ukwirednews.com/news/149350/US-Federal-Reserves-Ben-Bernanke-to-face-press [Accessed 1st Aug 2014]

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