September 21, 2011

WASHINGTON (AFP) – The Federal Reserve is widely expected to offer up some new stimulus for the sagging US economy when it closes a key policy meeting Wednesday, but many question whether it will do much.

The two-day meeting of the central bank’s Federal Open Market Committee might move to further press down long-term interest rates, in hopes of prodding cash-rich banks to lend and companies to invest despite gloomy economic forecasts.

But worries by some FOMC members over rising prices was expected to temper any strong moves, including a renewed “quantitative easing” program that would inject billions of dollars of liquidity into the economy.

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Modest moves could disappoint markets hoping for a big move — but would appease those fearful that the Fed could deadlock over how it should deploy its limited bag of monetary tools.

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