Federal Reserve expected to finalize the proposal for financial stimulus in the next two months

Ben Bernanke and group might at last be in a mood for a fiscal stimulus after all as the minutes of July 31 and August 1 meeting were released to the public on Wednesday.

Experts are of the opinion that a financial stimulus might be in order in the near future, however, there are concerns  over the conditions that have been put forth for such an easing.

“Many members judged that additional monetary accommodation would likely be warranted fairly soon,” the minutes read, helping the stock market cut losses Wednesday afternoon. However, traders had a growing concern over strong remark Thursday though: “unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.”

The Federal Reserve might be in a mood for a financial easing but there are certain aspects that need to be seen from a closer range to make sure that such injection of taxpayers’ money would bear fruit.

Bernanke and company are still looking for clues that there is a need for a financial push from the central bank. The stock market is aching and third quarter reports from a number of company is evident of it. Facebook is showing stagnant progress, or the lack of it. HP has shown a less than stellar performance in the same quarter.

However, the new home market is showing progress. So far the domestic real estate market has shown 3.6 percent increase in the annual average of 372,000 house sales. This is promising and wards off the need of financial push from Fed in its right.

Many financial pundits are expected a stronger clue from Bernanke at the annual Jackson Hole economic conference in a precursor to the Fed’s Sept. 12-13 policy meeting. They say that the Chairman is waiting for the monthly employment data on the month of August that is expected on September 7.

All these cogs might join together to form a strong reason for a stimulus that if approved might kick-in in latter part of the year.

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Posted by Usman Khalid on Aug 24 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.