Fed will act in wake of jobs report: BBVA’s Karp
June 1, 2012, 1:31 PM
The Federal Reserve is likely to decide to ease again at the next meeting in June in the wake of the weak job report, said Nathaniel Karp, chief economist at BBVA Compass. “They have to do something. They have to show their face,” Karp said in an interview.
With Congress seemingly in no position to react to the weaker outlook, “the Fed is the only man standing,” he said.
Karp said Fed officials would likely extend its $400 billion Operation Twist plan that was set to expire at the end of June.
Under the Twist plan, the Fed is swapping short-term debt on its balance sheet for longer-term securities.
Karp said extending Twist would ease the economy’s ills but is not a cure for the disease. But the majority on the Federal Open Market Committee is not ready for another large scale asset purchase plan, he said...