We could get another round of easing from the Fed soon. From Bloomberg after the latest FOMC meeting:
The Federal Reserve said it’s willing to ease monetary policy further to spur growth and support prices while refraining today from expanding its holdings of securities.
“The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Open Market Committee said today in a statement in Washington.
Policy makers said the pace of recovery and job growth have “slowed in recent months.” The committee also said “measures of underlying inflation are currently at levels somewhat below those the committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.”
Gold rose, the dollar fell and the yield on two-year Treasuries hit a record low on speculation Chairman Ben S. Bernanke will purchase additional U.S. government securities in coming months in an effort to lower long-term interest rates. The FOMC retained its stance from last month of keeping its portfolio stable at around $2 trillion to keep money from draining out of the financial system.
But meanwhile, the US housing market seems to be stabilising. Again from Bloomberg:
Housing starts in the U.S. increased more than forecast in August, outstripping a gain in building permits that signals residential construction will stay close to record lows.
Builders began work on 598,000 homes at an annual rate, up 10.5 percent and the most since April, the Commerce Department said today in Washington. Economists surveyed by Bloomberg News forecast a 550,000 pace. Permits, an indicator of future activity, were issued at a 569,000 rate.