Questions And Answers On The Fed's Latest Actions
Q. Why is it making this change at this time?
A. Most economists expected the Fed to adopt the new guidance next year. By moving now, it's possible that Fed Chairman Ben Bernanke is trying to get a jump on the "fiscal cliff," the package of tax increases and spending cuts that are scheduled to kick in next year. Unless the White House and Congress can reach a deal to replace the cliff, it could push the economy into recession. But in a news conference Wednesday Bernanke reiterated his view that the Fed's actions can't fully offset the impact of the cliff.
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