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Episode #14

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

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Friday, July 27, 2012

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?

Hosted by:

Jeff Greenfield

Contributors:

Rana Foroohar and Joe Nocera

Comments [1]

Peter Palms from Kirkland Wa.

Europe cannot be saved because all of the Central banks in the world except Cuba, North Korea and Iran are owned by the Rothschild. They will all collapse together. Gross Domestic product will continue to drop due to Industrialization replacing the labor force and export of jobs to other countries with lower wage rate as well as a drop in consumption caused by children moving back in with parents to eliminate mortgages on overvalued homes.Inflation by the Fed through Quantitative easing would further aggravate inflation.It has gone to far to stop the collapse nor is there any intention to do so.
Too much wealth has been transferred. 7% of the population of the world now owns 57% of the world
They are not going to give it back. The only thing that will work if they do not give it back will be world government by a New World Order consisting of totalitarianism. Our only option left is if Congress rescinds the charter of the Fed.Not enough people are waking up as yet to force this about.

Jul. 29 2012 06:31 PM

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