Fed is expected to take new action to lift economy

[AP] - The Federal Reserve is running out of options to try to boost a slumping economy and lower unemployment. So policymakers are expected to reach 50 years back into their playbook for their next move.

[AP] - The Federal Reserve is running out of options to try to boost a slumping economy and lower unemployment. So policymakers are expected to reach 50 years back into their playbook for their next move.

From an article by myself and Jeffry Frieden in the newly released Foreign Policy: We need ...inflation -- just enough to reduce the debt burden to more manageable levels, which probably means in the 4 to 6 percent range for several years. The Fed could accomplish this by adopting a flexible inflation target, one pegged to the rate of unemployment.

(WASHINGTON) — The Federal Reserve is widely expected Wednesday to stick with its aggressive efforts to strengthen a still-subpar economy. The Fed will likely end a two-day meeting with a statement noting that job growth remains modest and that it’s standing by its campaign to keep loan rates at record lows to help ease unemployment. (MORE: Is the Price of Gold Signaling an Economic Slowdown?) The central bank’s efforts include buying $85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing costs down.

(WASHINGTON) — The Federal Reserve is widely expected Wednesday to stick with its aggressive efforts to strengthen a still-subpar economy. The Fed will likely end a two-day meeting with a statement noting that job growth remains modest and that it’s standing by its campaign to keep loan rates at record lows to help ease unemployment. (MORE: Is the Price of Gold Signaling an Economic Slowdown?) The central bank’s efforts include buying $85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing costs down.

WASHINGTON — A combination of scant inflation and still-modest U.S. economic growth will likely lead the Federal Reserve this week to maintain its drive to keep borrowing costs at record lows indefinitely. The Fed has said it plans to keep its key short-term interest rate near zero at least until the unemployment rate dips below 6.5 percent from its current 7.6 percent. It’s also been buying $85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing rates down. The goal has been to energize the economy through more consumer and corporate borrowing.