Currently the Fed continued to hold interest rates scale as expected by the market, but the Fed also will reduce loans to buy housing sector until the end of March 2010.

This is seen as a step to withdraw its support to push the economy in the fall.

“They (the Fed) said it would change the policy used to do that is like buying debt instruments. Because the market is very worried about what would happen if the Fed had done that,” said Portfolio Manager of the Swarthmore Group Kurt Brunner was quoted as saying by Reuters on Thursday (24/9/2009).

These concerns led to the positive sentiment that Wall Street market decline. The Dow Jones fell 81.32 points (0.83%) to 9748.55. S & P index also fell 10.79 points (1.01%) to 1060.87. Then the Nasdaq index down 14.88 points (0.69%) to 2131.42.

Actually stocks Wall Street experienced a sharp rise after the Fed said that economic activity will increase, but at the last moments of trading, the market turned down because of fears the Fed will pull the stimulus package.

“Typically the banking crisis has long-term impact on the level of economic output, although growth eventually recover. The low employment, investment and productivity all contributed to the decline in output,” said the IMF World Economic Outlook (WEO) released his economists.

The conclusion is presented in a report released ahead of the agency’s annual meeting in Istanbul early October. IMF economists refer to the 88 banking crises during the last four decades in some countries.

Reduced output in the medium term after the banking crisis, substantial votes. Seven years after the crisis, output will fall relatively close to 10% on average. The persistence of the effects of banking crises arising from the decline assessed economic output in the beginning of the crisis, which was followed by weak investment and rising unemployment.

“Output per capita is not restored to pre-crisis levels because of capital per worker, unemployment and productivity levels are generally not returned to pre-crisis level in seven years after the crisis occurs,” the IMF economists.

Further, the IMF stated that the results of a study that led to suggestions that the domestic macroeconomic policies necessary proactive in mitigating the short term to medium-term decline inner output.