Fed to signal more easing but stop short of big steps

The Federal Reserve is likely to show on Wednesday that it is ready to act against a weakening economy but stop short of aggressive measures for now.
Economists say the central bank could well push back its guidance for when it sees the need for an eventual rate hike into 2015 from the current Fed consensus of late-2014, a move that could signal the depth of the central bank's concerns about the economy and hint at new measures ahead.
Wall Street is braced for another round of Fed bond purchases, and some see an off chance that it might even come this afternoon. But analysts believe policymakers will wait until at least September, giving them more time to lay out the case for their preferred method for easing policy in speeches between now and then.
"We do not expect any new initiative from the Fed," said Eric Green, economist at TD Securities. "A dovish statement signaling willingness to do more will manage frustrated expectations for more (monetary easing)."
Fed officials will hint at their intent to deliver further stimulus in part through what most analysts envision as a substantially weaker outlook on the U.S. economy than that delivered in June.

Read more:  http://www.reuters.com/article/2012/08/01/us-usa-fed-idUSBRE87007A20120801