"Significant uncertainty" surrounding U.S. economic growth: Treasury

10:10, November 04, 2010      

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The U.S. economic growth outlook was highly uncertain and the government would try to keep its borrowing costs lowl, the Treasury Department said in a statement released Wednesday.

"Members noted that there was significant uncertainty surrounding ...the economic growth outlook," said the minutes of the meeting of the U.S. Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association.

According to the document, members also talked about the impact of the Federal Reserve's potential quantitative easing (QE2), which may work at cross purposes with Treasury's policy, given Treasury is extending the average maturity of its portfolio while the Fed is expected to purchase longer-dated securities.

It is widely believed the Fed is all but certain to detail its plan for buying more government bonds after it wraps up its two-day meeting Wednesday.

The Treasury Department said it "should adhere to its mandate of assuring the lowest cost of borrowing over time, regardless of the Fed's monetary policy."

It said it planned to keep its borrowing steady for the next three months. It said earlier this week it would borrow 362 billion dollars in the current quarter.

The U.S. federal deficit reached 1.3 trillion dollars in 2010, down from a record-setting 1.42 trillion dollars in budget year 2009.

U.S. real gross domestic product (GDP), the broad measure of the economy, increased at a 2 percent annual rate in the third quarter, somewhat faster than the 1.7 percent rate in the prior quarter.

Source: Xinhua


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