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ECONOMIST VIEWS: WHAT WILL THE FED DO THIS WEEK?

PAUL DALES | CAPITAL ECONOMICS
"It is doubtful that the Fed will get any closer to dropping its pledge to keep rates exceptionally low for ‘an extended period’ at the two-day meeting that concludes this Wednesday. In fact, we continue to think that the Fed will keep rates on hold until at least 2012."

PHILIP SHAW | INVESTEC
"Once again a tightening is well off the agenda. First, the Fed is still signalling that rates will remain exceptionally low for an ‘extended period’. Officials have said unemployment is too high. Third, final demand is firming but progress is modest. Finally, inflation pressures have waned."

JAMES KNIGHTLEY | ING
"There is a growing divergence of views on the language to be used. Some of the Fed are concerned that they are boxing themselves in in terms of how long rates will be left at the current level.

A change is a distinct possibility and this could pave the way for a fourth quarter hike."