Economists fear Fed lacks the weaponry to fight off double-dip
Growth in the US economy has slowed amid a series of troubling economic indicators, raising fears of a second leg of the recession. The Federal Reserve and other government agencies maintain they still have the weapons in their armoury to tackle such a setback, but some economists are not so convinced.
The dramatic twists and turns seen in the markets in recent times may well be used as a reference point in financial textbooks of how investor sentiment can shift in the blink of an eye. But the sudden reversal of positive feeling towards the US economy has caught many market participants by surprise. All the talk of a decoupling between the US and Europe – a theory that had many proponents at the height of the euro sovereign crisis in May – has, for now at least, gone quiet.
US credit investors
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