Fed meets under gun to act on weak economy

The Federal Reserve's policy board began a two-day meeting Wednesday to weigh a fresh response to the weak US economy and stagnant jobs market.
The dollar fell against the euro and stock markets rose amid anticipation that the Federal Open Market Committee would decide on some form of monetary easing action.
Options, analysts said, include a strong verbal statement by the FOMC committing themselves to holding their benchmark interest rate at the current near-zero level through 2015.
But also possible is the launch of "QE3", a huge "quantitative easing" bond-buying program aimed at further depressing long-term interest rates.
"The Fed has made it clear that some form of easing will take place at its meeting this week. There seems little doubt that the easing will entail a strengthening of its verbal guidance on the low-for-long policy," said Peter Hooper and Torsten Slok of Deutsche Bank.
"Whether we get another dose of QE announced now is close to a toss-up," they added.
Pressure has been building for new action by the FOMC for months as economic growth sank to 1.7 percent in the second quarter and looks possible to fall below the 2.0 percent level in the third.