Federal Reserve expected to announce new action to spur economy

Wed Sep 21st 2011

Investors are looking to see whether the Federal Reserve will take new steps to stimulate the economy today when policymakers wrap up a meeting.

Many economists expect the Fed to shift money out of short-term securities and into long-term holdings. The aim would be to further reduce interest rates on mortgages and other consumer and business loans.

Yesterday, the four highest-ranking Republicans in Congress sent Fed chairman Ben Bernanke (bur-NANG'-kee) a letter cautioning against such a move, saying it could spark inflation.

The Fed said recently that the economy will likely struggle for at least two more years.