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Fed likely to take bold step after dim jobs report

Associated Press Modified: September 7, 2012 at 12:00 pm •  Published: September 7, 2012
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WASHINGTON (AP) — Will the Federal Reserve go big next week?

Most economists say they expect the Fed to announce action to try to stimulate the economy. And many now think the Fed will make the boldest move it can — a third round of bond buying to try to lower long-term interest rates.

This is known as quantitative easing.

"If there was any lingering doubt within the Fed about announcing a new round of quantitative easing next week, this should surely push them over the edge," said Tom Porcelli, an economist at RBC.

Nigel Gault, chief U.S. economist at IHS Global Insight, thinks the Fed will focus any new purchases on mortgage-backed securities to try to lower mortgage rates and boost the fledgling housing recovery.


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