Tags: Japan | Nomura | Fed | Ease | Monetary | Policy | august

Japan's Nomura: Fed Will Ease Monetary Policy on Aug. 10

Monday, 02 Aug 2010 08:20 AM

Japanese investment bank Nomura, one of 18 primary dealers that trade with the Federal Reserve, says the Fed will begin to ease monetary policy at its Aug. 10 meeting, in response to the recent slowdown in growth in the U.S. economy.

“Easing is going to be very seriously considered given several months of disappointing data and the very dovish tone of public commentary across the spectrum,” said Zach Pandl, an economist at Nomura Securities International in New York, told Bloomberg Business Week.

“If the Fed is averse to buying more assets, then cutting the rates of interest on reserves could be the next option.”

Nomura economists say there is a possibility the Fed will take other actions, such as cutting the rate on excess reserves.

The bank’s comments came because of a softening of the comments from policymakers such as St. Louis Fed President James Bullard, who recently said that the central bank should buy more Treasury securities if the economy slows and prices fall instead of keeping interest rates near zero, and the Fed’s downward revision for growth.

"We now believe that current conditions have moved policymakers into action and that the FOMC will adopt a more accommodative stance at its 10 August meeting," Nomura economist Paul Sheard wrote in a research paper, according to CNBC.

"A concerned and forward-looking policymaker would presumably take action some time before the economy had irreversibly slipped from sustainability."

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Japanese investment bank Nomura, one of 18 primary dealers that trade with the Federal Reserve, says the Fed will begin to ease monetary policy at its Aug. 10 meeting, in response to the recent slowdown in growth in the U.S. economy. Easing is going to be very seriously...
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2010-20-02
Monday, 02 Aug 2010 08:20 AM
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