tough scrutiny.
The FSB will consider initial draft recommendations in Julybefore being passed on to the G20 itself in the autumn. Abackground note will be published later this month.
(Reporting by Gavin Jones and Huw Jones; Additionalreporting by Catherine Hornby in Rome; Editing by RichardChang)
If the economic recovery falters, there are no easy options left to bolster it.
That is the grim reality facing the U.S. Federal Reserve and the Group of 20 world leaders as both meet this week to plot their policy course.
For the Fed
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christian louboutin luly mary jane pumps , keeping short-term rates near zero is a foregone conclusion. The tough part is how to express its views on the economy without giving false signals on when it might move.
Citigroup economist Robert DiClemente said the Fed will want to acknowledge "new uncertainties" about the strength of the U.S. recovery.
That means it won't jettison a pledge it first made in March 2009 to keep rates ultra-low for an extended period
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Reasons for the Fed to doubt the recovery include Europe's simmering debt troubles, poor U.S. job growth, and a wobbly U.S. housing market.
Fed officials have expressed confidence in the recovery's sustainability
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With no room left to lower interest rates, the most powerful policy tool remaining is resuming asset purchases, but doing so would no doubt draw fire from those who fear the Fed is sowing the seeds of runaway inflation by printing money.
One of the biggest economic red flags is coming from a lesser-known U.S. economic indicator: the Economic Cycle Research Institute's weekly leading index.
The index, which comes out every Friday, hit a 45-week low last week. ECRI was remarkably accurate in predicting the latest recession (it peaked around the middle of 2007; the recession officially began in December of that year). It also foreshadowed the unexpectedly strong 2009 recovery.
Now it is signaling a marked slowdown.
MUDDLED MESSAGE
For the G20, which meets in Toronto late this week, the economic uncertainty tugs at already strained ties. Rifts have emerged between all three of the major economic players -- the United States, Europe and China.
The transatlantic tension centers on how quickly to rescind stimulus measures the G20 readily
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