STOCK MARKET WATCH, Wednesday, December 14, 2011

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37. Fed battling economic forces beyond its control

http://bottomline.msnbc.msn.com/_news/2011/12/13/9420052-fed-battling-economic-forces-beyond-its-control

Four years and $1.8 trillion after the worst financial collapse since the 1930s, there appears to be little more the Federal Reserve can do to get the U.S. economy back on track. Rarely in the central bank’s 99-year history has so much been so far beyond its control.

At their regularly scheduled meeting Tuesday, Federal Reserve policymakers made no changes in interest rates and held fire on buying more bonds to pump cash into the financial system. Beyond that, they were expected to devote much time at the meeting to an extensive discussion about changing the way the committee communicates its decision-making with the public.

Fed policymakers have gotten a bit of breathing room lately from data showing a gradual pickup in the U.S. economy. But that growth remains threatened by the financial crisis in Europe, the ongoing budget gridlock in Washington and a housing market that shows no sign of emerging from a deep recession.

After spending close to $2 trillion to put out the financial fires that swept through the U.S. banking system in 2008, Fed officials have watched their European counterparts fail to move decisively as fearful investors flee eurozone countries teetering on the brink of default. Despite calls to backstop Greece, Italy and Spain, the European Central Bank has responded tepidly to the crisis, arguing that those countries need to work harder to balance bloated budgets.