No policy changes are expected as Fed ends meeting

WASHINGTON (AP) — The Federal Reserve is widely expected Wednesday to stick with its aggressive efforts to strengthen a still-subpar economy.

The Fed will likely end a two-day meeting with a statement noting that job growth remains modest and that it's standing by its campaign to keep loan rates at record lows to help ease unemployment.

The central bank's efforts include buying $85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing costs down.

Investors will have only the Fed's brief statement to study for clues to its thinking. This isn't one of the four policy meetings each year that are capped by a news conference by Chairman Ben Bernanke.

Besides buying bonds to keep long-term rates down, the Fed has said it plans to keep its key short-term rate near zero at least until the unemployment rate dips below 6.5 percent from its current 7.6 percent. The goal is for consumers and businesses to borrow and spend more to energize the economy.

Many economists had suggested that the Fed might scale back its bond purchases in the second half of 2013 if job growth accelerated. But the jobs report for March was surprisingly weak. And inflation has been running below the Fed's target rate, allowing it to keep stimulating the economy without igniting price increases.

"I am not looking for any major action from this meeting," says David Jones, an economist at DMJ Advisors.

The minutes of the Fed's last meeting in March indicated that some policymakers favored slowing and eventually ending its bond buying — as long as the economy and the job market kept improving. Some feared that keeping rates too low for too long could escalate inflation, fuel speculative asset bubbles or unsettle markets once the Fed has to start raising rates or unloading its record $3 trillion investment portfolio.

Early this month, though, the government said U.S. employers added only 88,000 jobs in March, far below the 220,000 average in the previous four months. Last week, it said the economy grew at an annual rate of 2.5 percent in the January-March quarter — a decent growth rate but one that's expected to weaken in coming months because of federal spending cuts and higher Social Security taxes.

At the same time, consumer inflation as measured by the gauge the Fed most closely monitors remains well below its 2 percent target. That gauge rose just 1 percent in the 12 months that ended in March.

Many analysts now think the Fed will keep the Fed's easy-credit policies unchanged, possibly for the rest of the year.

"The government's fiscal austerity is kicking in and hitting the economy hard," says Mark Zandi, chief economist at Moody's Analytics. "I am not looking for any change in Fed policy at this meeting, not with this weak growth and low inflation."

The Fed's goal is to keep price changes from hurting the economy. This could occur if inflation raged out of control or if the opposite problem — deflation — emerged. Deflation is a prolonged drop in wages, prices and the value of assets like stocks and houses.

The United States last suffered serious deflation during the Great Depression of the 1930s but Fed policymakers worry more about the threat of deflation any time prices go lower than 2 percent. They want to avoid following the path of Japan, which has struggled with weak growth and deflation for more than two decades.

Economists believe the latest economic data will embolden the majority of officials who back Bernanke's commitment to keep borrowing rates down until the economy shows sustained improvement — as long as inflation stays low.

Brian Bethune, an economics professor at Gordon College in Wenham, Mass., says the Fed needs to be especially cautious in signaling any policy shift because the U.S. economy has been serving as a global engine of growth. Many European countries are still struggling to escape a recession that followed the region's debt crisis.

"Anything the Fed did that could disrupt things or create uncertainty could tip the whole global economy back into recession," Bethune says.

Few expect the central bank to start raising short-term rates before late 2015 or early 2016. And many economists think the Fed will keep buying $85 billion in bonds each month for the rest of this year, before starting to curtail its purchases in early 2014.

Via Yahoo News!

Clashes in Greece, parliament expected to approve bill (Reuters)

ATHENS (Reuters) - – Greek police clashed with protesters outside parliament in the early hours of Thursday ahead of a decisive vote expected to approve a final austerity bill needed to avert default.

The government of Prime Minister George Papandreou, which won a first vote on Wednesday by 155 to 138 votes, expects to pass the second and final bill of tax hikes, spending targets and privatizations agreed as part of an EU/IMF bailout.

Riot police fired teargas. Hundreds of officers wielding batons chased black-clad youths who hurled stones, wrecked shops and set fire to buildings.

Lawmakers passed a first bill on Wednesday to enact the austerity plan and must vote on Thursday on a law to implement it. The measures have been demanded by international lenders in exchange for keeping Greece afloat.

"I expect that the MPs who backed the mid-term plan will also vote for the implementation law," government spokesman Ilias Mosialos said in a television interview.

Both bills laying out the 28 billion euro ($40 billion) austerity plan must be passed for the European Union and International Monetary Fund to release a 12-billion-euro loan tranche of a 110-billion-euro bailout which the government needs to stay afloat.

They are also needed for talks on a planned second bailout of about the same size that will include some 30 billion euros in private-sector participation. Locked out of bond markets, Greece needs the extra cash to avert default and keep the debt crisis from spilling over to the rest of the euro zone.

Papandreou, who reshuffled his cabinet earlier this month to secure support for the bills, said he was determined to push through reforms.

"Today, I am more determined than ever," Papandreou said. "Now is the time to tackle everything that that is wrong, with everything that hurts us, that holds us back."

Thursday's vote enables individual budget measures and creates a privatization agency. The conservative New Democracy opposition, which voted against the first bill, said it would support some of the measures in the second.

"We will reject it in principle. However, we will support the privatizations mechanism as well as the articles on spending," said New Democracy deputy Yannis Vroutsis.

Parliament resumes debate on the second bill at 9:30 a.m. (0630 GMT) and the vote is not expected before 2 p.m. (1100 GMT). Before the debate, it had not yet been decided whether more than one vote would be needed to pass it.

Implementing the measures will be hard for the government, which has fallen behind the opposition in opinion polls and faced heated criticism from its own deputies during the parliament debate.

Unions, which paralyzed the country for 48 hours earlier this week, have vowed to oppose privatizations and other austerity steps. Anger among the Greek population was underlined by violence which erupted on Syntagma Square outside parliament as Wednesday's votes on the first bill were being counted.

Doctors working with the demonstrators said they had treated at least 25 people for minor injuries and hundreds with respiratory problems at the adjacent Syntagma metro station. At least 40 police officers were hurt, the police union said.

Hooded youths and police fought battles into the night, choking the city center with tear gas and smoke from petrol bombs. The protesters set fire to the post office in the building where the Finance Ministry is located, and tried to set ablaze a bank. Across the square, the luxury King George Hotel was evacuated.

Analysts said the real challenge for Greece will come after the bill is voted on and the international money secured.

"The implementation law will also pass, without problems," said Costas Panagopoulos, head of ALCO pollsters. "The real question is whether Papandreou will use this vote to move forward with these crucial reforms."

(Additional reporting by Harry Papachristou; Editing by Peter Graff)

Yahoo! News

Minot residents told to evacuate ahead of expected flooding

(CNN) -- Residents in Minot, North Dakota, have until Wednesday evening to leave their homes after authorities ordered the evacuation of some 12,000 people from the area because of expected record flooding.

Minot, located in the north-central part of the state, is the fourth-largest city in North Dakota.

Are you preparing for the flood in Minot? Share your story.

The swollen Souris River flows straight through the city and is expected to overwhelm area levees, said Cecily Fong, spokeswoman for the North Dakota Department of Emergency Services.

"It's really historic proportions of water," Fong said late Tuesday night.

The evacuation order covers a third of the community's population, Fong said. Residents have until 6 p.m. Wednesday to leave.

"The river is rising faster than expectations, so they (city officials) are kind of scrambling to shore up levees and do what they can," Fong said.

The National Weather Service has forecast record flooding and urged anyone living in the affected areas to prepare immediately for oncoming floodwaters. Heavy area rains and dam releases are causing the river to swell at Minot.

"The current best estimate for when water will overtop the lowest dikes in the Minot area is sometime on Thursday afternoon. However, a Wednesday night or early Thursday timeframe cannot be ruled out as the dikes become more stressed due to rising water," the weather service said.

The river at Minot, which currently stands at close to 1,555 feet above sea level, is forecast to rise to 1,559 feet on Friday or Saturday -- which would be a new record. The river hit 1,558 feet above sea level in 1881.

The Souris River looks like a "U." It swoops in and out of North Dakota from Canada.

CNN's Richard Benson contributed to this report.

CNN

Syria protests expected to resume

(CNN) -- Syria was braced for another day of unrest with pro-reform protesters expected to take to the streets across the country after Friday prayers.

Syrian security forces began pulling out of the restive southwestern town of Daraa a day earlier, after a mission to "restore security and calm," state TV reported. Government troops have been battling protesters over the past month and a half.

The human rights group Amnesty International says more than 500 people were killed during the clashes and thousands more were rounded up for questioning.

"Scores were arrested and huge amounts of up-to-date weapons and ammunition in several places were confiscated, which helped bring back the sense of safety to the residents of the city," a Syrian military source told the SANA news agency about the Daraa mission.

But the international activist group Avaaz said there was little sign of a Syrian withdrawal from Daraa, and warned that remaining Syrian armored units still pose a threat to demonstrators.

Syrian soldiers were gathered on the edges of Banias, a city on Syria's northwest coast, according to a witness who spoke to CNN Thursday.

"The army has deployed more than 30 tanks around Banias and 40 armored vehicles," said Anas Al Shaghri, a 23-year-old Syrian economics student. "We are told that the Syrian army will enter the city just like they did in Daraa any minute."

Citizen protesters are posted at checkpoints leading into Banias in an effort to keep the Syrian military out of the city, Al Shaghri said. "We just carry batons and telephones to film whenever the government thugs and armed security forces attack."

The Syrian military warned the protesters that "if we don't pull out the checkpoints the security forces will break into the city," he said.

But Al Shaghri said the protesters "are not terrorists, nor armed. We are simple a people longing for freedom."

At least 16 people have been arrested and detained in the city over the past three days, he said.

The announcement of the pullout from Daraa came a day after Syrian security forces arrested two people outside the University of Damascus as student demonstrators rallied for the release of political detainees, eyewitnesses told CNN. Army convoys and tanks rolled into the capital city, setting up what the witnesses described as a base in the central square.

"The army knows they cannot pressure the economic situation too much in Damascus. Everyone is trying to go about their work, school and their businesses," one eyewitness activist told CNN.

Amnesty International said it has received firsthand reports of torture and other ill treatment from detainees held in Syria, as a wave of arrests of anti-government protesters intensified over the weekend.

The organization said "widespread, arbitrary arrests" had taken place in towns across the country in recent days. At least 499 people were detained Sunday during house-to-house raids in Daraa, a key location for pro-reform protests, the group said, adding that most were being held at unknown locations without access to lawyers or their families.

The rights group also said it had the names of 54 people killed last Friday, which brought to 542 the number of people killed during a month and a half of protests in Syria. Amnesty International stated in a report that the high number of deaths can be attributed to the tactics used by Syrian security forces.

And in a statement released Thursday, Avaaz said more than 400 people -- including members of prominent families who took part in recent protests -- have been rounded up in the Damascus suburb of Zabadani. The group said 38 of those arrested were released Wednesday "and sent home with instructions to spread the word in their communities of their arrest and torture, as a warning to anyone involved in anti-government activism."

Another 300-plus arrests have been made in Sakba, another Damascus suburb, Avaaz said. CNN could not independently corroborate those reports.

Avaaz said more protests are expected across Syria after Friday prayers.

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Independent groups expected to rake in hundreds of millions

Outside groups' influence in 2012STORY HIGHLIGHTS Democratic third-party groups aim to raise up to $200 million in outside money for 2012
Democrats say they were trounced by GOP-aligned third-party groups in 2010 races
Groups grew after Supreme Court ruling allowing unlimited contributions by corporations
Conservative insists labor unions already help Democrats dominate outside spending RELATED TOPICSBarack ObamaPolitical PartiesU.S. Presidential ElectionKarl Rove Washington (CNN) -- As President Barack Obama kicks off the 2012 money race with a series of well-publicized re-election fundraisers in Chicago, Democratic operatives are quietly crisscrossing the nation to raise big money for new independent expenditure groups.

All told, these Democratic third-party groups aim to raise up to $200 million in outside money -- that's in addition to the $1 billion Obama's fundraisers set as their campaign goal. The number and size of the independent expenditure groups ballooned last year, thanks in part a Supreme Court ruling that allows unlimited contributions by corporations.

Obama heads home to kick off fundraising

There is some irony here: Obama has denounced these secretive third-party groups as tools of "powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans." But now Democrats say, after they were trounced in the 2010 midterm elections by GOP-aligned third-party groups --- including those founded by Karl Rove and the Koch brothers --- they have no choice but to join them.

Obama re-election campaign touts small-dollar contributions

Monica Dixon, the executive director of Majority PAC, one of these new groups, says, "We were just outgunned and outmanned last cycle. We didn't do a good job of supporting our candidates against this barrage of money that was spent against them. And so this cycle we are engaged. We are going to raise the money to defend our candidates against these attacks."

Analysis: Why Obama really announced today: M-o-n-e-y

Among the new Democratic groups are four SuperPACS, which are expected to be up and running by the end of this month. They are:

• House Majority PAC, which launched this week, is focused on helping Democrats regain control of the House of Representatives. It's run by three strategists previously involved in House campaigns and is planning ads that target vulnerable Republicans during the April congressional recess.

• Majority PAC was put together by some of the Democratic Party's most seasoned Senate campaign operatives. It will focus on ensuring that Democrats keep control of the Senate. They've begun raising money and choosing targets. Their goal, one operative says, is to start defining Republicans early in the cycle.

• A group dedicated to supporting Obama's re-election bid will open later this month. Helmed by former White House deputy press secretary Bill Burton and Sean Sweeney, former top aide to ex-Chief of Staff Rahm Emanuel, it aims to compete with American Crossroads --- the Rove-founded group --- which plans to raise $120 million this cycle.

• And a fourth group, American Bridge 21st Century, will provide opposition research and communications for Democratic races for Congress and the presidency. Founded by conservative-turned-liberal activist David Brock and chaired by former Maryland Lt. Gov. Kathleen Kennedy Townsend, it has a more far-reaching goal. In a statement to CNN, Rodell Mollineau, its president, says he hopes hopes to build the group "into an enduring political research and communications powerhouse."

Chris Harris, spokesman for American Bridge, tells CNN, "We are investing in a massive war room so we can define (GOP) candidates before they define themselves."

Organizers say the groups -- which are banned from coordinating with the campaigns -- are working with one another. Sources familiar with their plans tell CNN that American Bridge aims to raise $20 million to $30 million, the Burton-Sweeney presidential effort would try to raise $120 million, and in order to be competitive, Majority PAC would need to bring in $50 million to $100 million. There are no early projections for House Majority PAC's numbers.

Steven Law, president of the conservative outside group American Crossroads, insists that Democrats already dominate outside spending -- thanks to labor unions. "For years now the unions have perfected the art of doing outside campaign ads, outside voter turnout activity," Law said, adding, "We created American Crossroads to be a counterpoint to what the unions and other groups like Moveon.org have done very effectively for the last several elections."

He predicts liberal groups will outspend conservatives this cycle. But Democratic fundraisers laugh that off, saying Republicans can raise far more money from deep-pocketed donors.

Apparently, it's a race to lower expectations.

Many new Republican-aligned groups popped up last election, including the American Action Network, supported by top Republican fundraiser Fred Malek and former Sen. Norm Coleman on its board.

Other major players on the conservative side: the Chamber of Commerce, Americans for Prosperity and the Club for Growth, all of which made major investments in the midterm campaign ads against Democratic candidates.

American Crossroads and affiliate Crossroads GPS is the behemoth on the scene. Co-founded by Rove, it raised $71 million and in its first year last cycle and saturated the airwaves in some hotly contested campaigns. For the coming election, it says it hopes to raise $120 million. The group tells CNN within weeks it will air ads related to the federal budget fight.

"This is one election where literally everything is at stake: the White House, the Senate majority, the House majority and even the courts for potentially a generation so everybody's very engaged and interested. And they want to continue to play and hopefully affect the direction of the country in a positive way," American Crossroads' Law says.

One independent conservative group last weekend started airing a commercial in some key battleground states critical of the president. The spot, titled "Barack Obama's Legacy of Failure," was sponsored by the Campaign to Defeat Barack Obama.

Conservative group puts out anti-Obama TV ad

A number of these groups on both sides of the aisle are affiliated with highly secretive organizations known as 501(c)(4) groups ( a reference to their designation in the tax code), which don't have to report their donors to the Federal Election Commission.

Groups not directly affiliated with political parties accounted for $298.5 million in political spending during the 2010 midterms, according to the Center for Responsive Politics, which tracks the influence of money in politics.

This time around, expect even more.

"The numbers will dwarf the roughly $300 million in outside spending we witnessed in 2010. The only question that remains is, by how much?" said Dave Levinthal, a spokesman for the center.

CNN political research director Robert Yoon contributed to this report.

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