Global Recovery is likely to stay on track, according to bankers

Fed officials are consumed by a debate about whether they should do more to support growth and to prevent already-low inflation from falling further. The top option—laid out by Fed Chairman Ben Bernanke in a speech Friday—would be to resume buying long-term bonds to drive long-term interest rates down more. The Fed already has purchased $1.7 trillion worth of government bonds and mortgage debt and long-term rates are at their lowest levels in decades.

Most others at Jackson Hole endorsed Mr. Bernanke's view that the U.S. economy would resume moderate growth in 2011 after a sluggish second half of this year. "The most likely outcome is that the world is on track for a moderate recovery," said John Lipsky, the IMF's deputy managing director. The IMF expects to make only minor adjustments to its forecast, currently being reviewed ahead of IMF meetings in early October. "We had always anticipated there would be somewhat of a slowdown in the second half," he said. "Emerging markets are, if anything, stronger than we had anticipated and the latest data out of Europe is better."