Ahead of his crucial speech, Ben Bernanke may not able to take action on the slower global growth as he is yet to forge compromise of policy makers that they usually procure make sense.
Suspicious over central bank act to battle slower asset purchase sent industrial product prices and world shares lower on Tuesday, while there was nervousness ahead of the meeting. Investors are actually standing on toes to see Bernanke, Federal Reserve Chairman to present any suggestions of a third round of economic easing in his speech that he is expected to give this Friday at Jackson Hole, Wyoming.
The recent economic statistics look slightly better than the past, while the Chinese economy crisis has cut the demand for goods, like copper, iron ore, and steel. The chief executive of Fukoku Capital Management, Tokyo Yuuki Sakurai said that there aren’t lights provided at the end of the lane for the global economy.
MSCI’s world index has fell down over the past 7 meetings and it was 0.15% lower on today at 322.73 points. Europe’s FTS Eurofirst 300 index is down 0.3%, opened at 1082.52 points, while Euro Zone STOXX opened 0.4%. European share market is also going down, due to the uncertainty over Central Banks to handle the nation’s debt disaster.
European Central Bank is setting up to release their concrete plans very soon to help bring down borrowing prices in Italy and Spain at its policy summiting on Sept 6th, where a rate is also to be discussed. The single currency was 0.15% at $1.255 against the dollar, which is almost the same as the price that had released 7 weeks ago, at $1.2590.
The financial markets were going at a steady rate of 6.5 billion Euro on bond sale and it is believed that Italy is going to find some purchasers for the bonds under the nation’s high borrowing cost.
The chief economist at Bank of the West in San Francisco, Scott Anderson said that Bernanke doesn’t have the permission to release hints about quantitative easing. From couple of weeks, Federal is in the same position, unwilling to find better solution to get them to move. Prior to the meeting, economics estimate that Fed would ease. Bernanke and his team are closely watching the economy and they are even waiting for the August employment report, which would be released on September 7 and depending on that Bernanke would make some necessary changes and updates.