Fed weighs options on eve of Jackson Hole

Fed weighs options on eve of Jackson Hole
  Capital markets
Posted at 09:37 by Joseph Cotterill Ben Bernanke’s first task at this week’s Jackson Hole conference of central bankers will be to clarify his new policy of committing to keep rates low until mid-2013, the FT says. Beyond that commitment, the chances of a full “QE3″ are poor but the option at the centre of Fed debate is some kind of “twist”, not expanding its balance sheet in size, but extending the average maturity of the assets it holds. Bernanke’s justification for keeping rates low is likely to be a substantially poorer economic outlook than the Fed’s public forecast in June of 3.5 per cent growth in 2012, the WSJ reports.