'Massive' Asset Purchases Likely Loom for Bernanke

The Federal Reserve is expected to step up its buying of mortgage securities after policymakers meet today and tomorrow, Bloomberg reports. The outlook for the economy and job market has gotten bleaker since the Federal Open Market Committee last met 6 weeks ago and analysts believe Ben Bernanke is likely to announce more aggressive action to tackle deflation and boost the Fed's balance sheet.

"It takes massive balance-sheet expansion to generate significant easing in financial conditions,” said a Goldman Sachs economist. “More needs to be done.” The TALF program to spur consumer lending could expand to $1 trillion if the Fed ramps up its policies to ease liquidity, although skeptical economists say consumers are unlikely to want to borrow more until the employment picture improves significantly.