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US May Take Measures to Boost Economy, Ease Inflation Concerns

Written: 2012-03-08 13:35:10Updated: 2012-03-08 15:40:47

US May Take Measures to Boost Economy, Ease Inflation Concerns

The U.S. Federal Reserve is reportedly considering new types of measures that will boost the economy while easing concerns about inflation.

The Wall Street Journal said in its online edition Thursday that the Fed may implement a new bond purchase program to reduce inflationary pressure and bolster the economy if it concludes within months that new measures are necessary to bring new life into the economy.

The paper explained that the U.S. central bank’s plan is to supply the financial market with liquidity by purchasing state bonds or long-term mortgage bonds. It added that the funds will be offered over the short term at a low interest in order not to increase the circulation of currency in the market.

In previous expansive measures, the Fed lowered the long-term interest rate and bought back bonds to stimulate corporate investments and household consumption. However, this just invited criticism that the steps would result in inflation.

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