Inflation also is low -- so low that some economists worry more about the risk of falling prices and wages. But others say pumping more money into the economy will weaken the value of the dollar. They say it could raise inflation to dangerous levels -- and not just in America.
Interest rates in the United States and Europe are lower than in Asia and Latin America. As a result, Asian and Latin American economies are already struggling with an overflow of investments.
Large flows of capital can raise currency values and make export-based economies less competitive. Several nations are considering limits on capital.
The Fed’s action this week had been expected. But it comes as the heads of twenty leading economies prepare for talks in South Korea next week. And it came a day after the Republican Party retook control of the House of Representatives from the Democrats.
President Obama has invited leaders of both parties to meet on November eighteenth. One immediate issue: what to do with tax cuts that are set to end next month.
And that's the VOA Special English Economics Report. I'm Steve Ember.
Contributing: Heda Bayron, Jim Randle and Avi Arditti
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2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25