08/22/2011 06:47 pm ET | Updated Oct 22, 2011

Getting Realistic About What The Fed Can Do For The Economy

FORTUNE -- Can Ben Bernanke pull the U.S. economy out of its double dip? Some investors are betting he will. The Fed's announcement that it intends to keep short-term rates close to zero until mid-2013 was widely interpreted as a signal that further action is on the way, as was Bernanke's speech in Jackson Hole, Wyo. With an election year approaching, there is a lot of pressure on the Fed chairman. If the economy doesn't rebound in the next month or two, he will surely overrule objections within the Federal Open Market Committee and launch a third program of quantitative easing -- bond purchases financed by the creation of money.

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