Federal Reserve

PIMCO bond fund manager Bill Gross has acknowledged he made a mistake in betting so heavily against US government bonds earlier this year.

US Federal Reserve chairman Ben Bernanke is gearing up to deliver a key speech on the ailing US economy today - with markets looking on for hints of further stimulus.

The FTSE 100 climbed this morning and Asian and US markets rallied strongly overnight as the Federal Reserve announced it would hold interest rates at close to zero until 2013.

The FTSE 100 dipped below the 5,000 mark this morning after a short-lived rally at the start of trading.

Ratings agency Moody's has said it may cut the US AAA debt rating, pointing to the "rising possibility" the US will default on its debt obligations.

Minutes from the Federal Open Market Committee (FOMC)'s June meeting reveal members are divided over whether a third round of quantitative easing is the best option for the US economic recovery.

Sir John Gieve, the former deputy governor of the Bank of England, has called for the MPC to scrap plans for further quantitative easing or else risk a 20% devaluation in sterling and higher inflation for longer.

The FTSE has opened in negative territory after a gloomy assessment of the US economy pushed European shares lower.

The Federal Reserve has scaled down its growth forecast for the US in the face of higher energy costs and weak manufacturing data.

ALL DOOM AND GLOOM IN THE US?