Fed Nudges Economy

By: Associated Press
By: Associated Press

Worried about the economy, the Federal Reserve is taking a small step to bolster the sputtering recovery.

At the end of its meeting Tuesday, the Fed said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help nudge down long term rates on mortgages and corporate debt but wouldn't have a dramatic impact.

The Fed says economic growth will be "more modest" than it had thought just seven weeks ago.

Economists doubt the Fed can turn around the economy on its own. Some believe additional help from Congress is needed. Others are skeptical that easier credit or even more government aid will persuade Americans to shop more and hire more.

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