All eyes, however, will be on the U.S. central bank's policy decision at 2 p.m. (7:00 p.m. British time) on Wednesday, just a week before the Christmas holiday. It is Bernanke's last press conference as Fed chairman and he is expected to stress that interest rates will remain low for a long while irrespective of when the quantitative easing programme, or QE, is shelved.
About half of the 60 economists polled by Reuters last week expected the Fed to wait until March before it trims the asset purchases, which are meant to spur investment and hiring. Twelve saw the so-called QE tapering this week, up from three when the poll was done a month ago.
While U.S. unemployment dropped to a five-year low of 7 percent last month, U.S. GDP growth is expected to stall this quarter as businesses cut inventories, complicating the central bank's decision.
"Timing the reduction in stimulus, while at the same time convincing the economy it's a good thing to do, is going to be challenging," said Jerry Webman, chief economist at investment manager OppenheimerFunds.
"Right now if you look at the U.S., Europe, China, and Japan, they all look to varying extents okay - but they're not accelerating."
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ReplyDeleteAll eyes, however, will be on the U.S. central bank's policy decision at 2 p.m. (7:00 p.m. British time) on Wednesday, just a week before the Christmas holiday. It is Bernanke's last press conference as Fed chairman and he is expected to stress that interest rates will remain low for a long while irrespective of when the quantitative easing programme, or QE, is shelved.
About half of the 60 economists polled by Reuters last week expected the Fed to wait until March before it trims the asset purchases, which are meant to spur investment and hiring. Twelve saw the so-called QE tapering this week, up from three when the poll was done a month ago.
While U.S. unemployment dropped to a five-year low of 7 percent last month, U.S. GDP growth is expected to stall this quarter as businesses cut inventories, complicating the central bank's decision.
"Timing the reduction in stimulus, while at the same time convincing the economy it's a good thing to do, is going to be challenging," said Jerry Webman, chief economist at investment manager OppenheimerFunds.
"Right now if you look at the U.S., Europe, China, and Japan, they all look to varying extents okay - but they're not accelerating."
(Additional reporting by Herbert Lash
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