Three voting members of the Federal Reserve's policy committeesignaled Wednesday that they would support further action by theFed if the economy weakens. Janet Yellen, the vice chairman of the Fed, Dennis Lockhart,president of the Fed's Atlanta regional bank, and John Williams,president of the Fed's San Francisco regional bank, all said inspeeches that they would back more stimulus if conditions worsened. Yellen, an ally of Chairman Ben Bernanke, says the Fed could pursuemore bond buying to lower long-term interest rates and encourageborrowing and lending. Or it could extend its plan to keepshort-term rates near zero beyond late 2014. But she acknowledged both options would have only limited effect onthe economy. Even so, Yellen said that keeping a more accommodating money policyin place for an extended period of time is needed to keep theeconomy on the path to recovery. In remarks prepared for delivery at a Federal Reserve Bank ofBoston dinner, she noted that despite some modest improvement oflate, the weak housing sector remains one of several factorsweighing down the economic recovery and keeping the nation'sunemployment rate elevated. "Given these headwinds, I believe that a highly accommodativemonetary policy will be needed for quite some time to help theeconomy mend," Yellen said. Lockhart voiced a similar observation at a speech earlier inFlorida. He said dismal job growth in April and May highlighted the problemsfacing the "halting and tenuous" recovery. If conditionsdeteriorate, "further monetary actions to support the recovery willcertainly need to be considered," he added. Lockhart did not specify what measures should be weighed. But manyinvestors hope the Fed will continue buying bonds in an effort todrive down long-term interest rates. Speaking to Seattle-area community leaders in Bellevue, Wash.,Williams spelled out ways the Fed could help counter a worseningeconomic and unemployment outlook, or a scenario where inflationfalls significantly. "In such circumstances, an effective tool would be furtherpurchases of longer-maturity securities, potentially includingagency mortgage-backed securities," he said. "Past purchases havesucceeded in lowering borrowing costs and improving financialconditions, thereby supporting economic recovery." Bernanke will testify Thursday on Capitol Hill and could providefurther guidance on Fed policymaking. The Fed has done two rounds of bond purchases to try to lowerlong-term interest rates and encourage borrowing and spending.After those purchases ended, the Fed began a program dubbedOperation Twist: It sells shorter-term securities and buyslonger-term bonds to keep their rates down. Operation Twist is setto expire at the end of this month. Bernanke has said that more bond purchases, or other steps by theFed, are still an option if the economy weakens. But many analystsdon't expect further moves at the Fed's next policy meeting June19-20. They note that long-term rates have already touched recordlows. And few think further Fed action would lower them much more. Many economists think Bernanke will discuss the possibility offurther Fed efforts at a news conference after the June meeting butwon't announce any new actions. Some say he could help shore upconfidence by reiterating that more action remains an option shouldthe economy weaken. The e-commerce company in China offers quality products such as Audi Condenser Manufacturer , Toyota Condenser, and more. For more , please visit Honda Condenser today!
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