Global stocks rose today as Greece will hold a call with its main creditors after “substantive” discussions about obtaining a sixth installment of aid, the Athens-based finance ministry said. Italy’s credit rating was cut by S&P, the country’s first downgrade in five years, as Greece’s worsening fiscal crisis fans concern that contagion will engulf countries such as Spain and Italy.
Federal Reserve officials might propose new measures to galvanize the economy when the Fed Open Market Committee completes a two-day meeting tomorrow. Ben S. Bernanke, the central bank’s chairman, told economists Sept. 9 in Minneapolis that policy makers have measures at hand and are “prepared to employ these tools as appropriate.”
One of those untested policy tools is likely to be a move known as “Operation Twist,” in which the Fed would replace short-term Treasuries in its $1.65 trillion portfolio with long- term bonds, according to 71 percent of 42 surveyed economists. The move, with its goal to bend the yield curve, will probably fail to reduce the 9.1 percent unemployment rate, 61 percent of the economists said.
