Has the Federal Reserve Run Out of Tools? And Drought Repercussions

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The American economy is slowing down.

GDP grew at a 1.5 percent rate in the second quarter, down from 1.9 percent in the first quarter, and anticipation is growing over what the Federal Reserve's policy-making committee will decide when it meets next week.

Fed Chairman Ben Bernanke recently told Congress that a third round of quantitative easing, or QE3, is on the table because it could stimulate the economy and bring down long-term interest rates.

But the results of such a program remain to be seen, and economists can't seem to agree on what, if anything, the Federal Reserve can do to curb the unemployment rate and get the economy moving again.

The Fed has pushed down its main interest rate to just above zero. It's been there since December 2008, but the recovery has done little more than sputter along.

So what other tools does the Fed Chairman have at his disposal? And, could they succeed in the current economic climate?

Rana Foroohar of Time and Joe Nocera of the New York Times weigh in on how Fed policy affects the daily economic life of millions of Americans. 

Plus, as the United States continues to struggle with its worst drought in 50 years, how is the adverse weather affecting people and prices around the world?