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Some experts skeptical about a new Fed stimulus plan

The U.S. Federal Reserve building is seen in Washington D.C.

Jeremy Hobson: Let's get some analysis now from Bruce McCain, who is chief investment strategist with Key Private Bank. He's with us live from Cleveland. Good morning.

Bruce McCain: Good morning.

Hobson: So Bruce, do you think that the Fed Chairman Ben Bernanke is going to step in now and rescue this flailing economy from its pathetic 1 percent growth?

McCain: Well, a lot of investors hope that he will, but we think the Federal Reserve will not announce any aggressive policy moves in the Jackson Hole speech. Although Chairman Bernanke will probably be very liberal in pointing to the range of things they could do, if needed. Part of the issue is that while the economy has obviously been weak in recent months, there's strong evidence that Japanese supply constraints may have reduced economic growth in the second quarter by a full percentage point or more. And we don't think that if you'd seen economic growth over 2 percent this morning, there would be as much of a case for aggressive stimulus at this point.

Hobson: Bruce, if we don't get aggressive stimulus from the Fed, or at least an announcement of that this morning, quickly -- do you think we'll be alright with the economy?

McCain: I think there is longer-term in question -- not only about whether or not the economic growth has been damaged by the market sell-off and what that's done to public confidence. But also, the issue of potential slowing overseas. It's simply that the Federal Reserve can afford to wait a little bit, see how much re-acceleration of growth may occur as we resolve those supply constraints. And then, if needed, they still have the option to act. So they're retaining the option either way, but we think it might be a bit pre-mature for them to act today.

Hobson: Bruce McCain, chief investment strategist with Key Private Bank, thanks so much.

McCain: Good to be with you.

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