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Federal Reserve Chairman Ben Bernanke will likely acknowledge the U.S. central bank is actively considering another round of monetary easing in his keynote Jackson Hole speech on Friday.
But the Fed chief could disappoint fidgety financial markets if he stops short of signaling another bond-buying program is imminent, which many analysts say is a strong possibility.
"We have had low expectations for significant news," said Vincent Reinhart, an economist at Morgan Stanley and a former top staffer at the Fed.
For one thing, minutes of the Fed's last meeting were already very strongly worded in the direction of further stimulus. Indeed, that report suggested a high bar for the Fed not to embark on a fresh stimulus push, with many policymakers wanting to see "a substantial and sustainable strengthening" of the economic recovery to stay on hold.
Speaking on the sidelines ahead of the Fed's annual monetary policy symposium, Julia Coronado, economist at BNP Paribas, said data hinting at a bit of strengthening in the economy can hardly be said to meet that standard. She expects a solid easing signal from Bernanke's speech.
It would be difficult for Bernanke to be any firmer than the minutes without actively pre-empting the policy-setting Federal Open Market Committee, a step the chairman may be loath to take.
"We do not think Bernanke is inclined to front-run the committee less than two weeks ahead of the next meeting," said Michael Feroli, an economist at JPMorgan.
Any lack of concrete detail on the likely course of action could disappoint global stock markets, which have risen in recent weeks on expectations of more central bank intervention from both the Fed and the European Central Bank.
U.S. economic data has improved since the Fed's meeting, which came before a stronger-than-expected reading for July employment. Reports on retail sales, exports and housing have also been relatively solid. Data on consumer spending for July on Thursday showed the strongest reading in five months.
At the same time, the jobless rate rose to 8.3 percent in July and growth still appears too soft to bring it down by much any time soon. In addition, inflation is slowing and is running below the Fed's 2 percent target.
With that as a backdrop, Fed officials have been divided over whether an easier monetary policy is warranted. The central bank, which pushed overnight interest rates to near zero in late 2008, has already bought $2.3 trillion in bonds.
Atlanta Federal Reserve Bank President Dennis Lockhart, a central bank centrist, told CNBC on Thursday that officials will face a "close call" at their next policy meeting on September 12-13.
A Reuters poll published on Thursday showed investors second guessing the chances of more Fed stimulus. Only 44 percent of fund managers think the Fed will announce a third round of bond purchases in September, down from 70 percent last month.
The better run of data has also led economists to dial back their expectations. A Reuters poll of economists published on Friday put a 45 percent chance on a move in September.
As an alternative, many economists say, the Fed may simply push further into the future the date it thinks it will finally start to move interest rates higher. The central bank has said since January that it expects to keep rates near zero at least through late 2014.