Wall Street dropped as Caterpillar slashed its earnings forecast and a Federal Reserve official said he believed the central bank's plan for more asset purchases will do little to bolster the pace of economic expansion.
"I believe that increasing monetary policy accommodation is neither appropriate nor likely to be effective in the current environment," Philadelphia Fed President Charles Plosser said today in a speech at the bank. He doesn't hold a voting position.
He expects the US economy to grow by about 3 per cent per year in 2013 and 2014.
As a clear sign of the troubled environment, Caterpillar became the latest company to cut its earnings outlook, downgrading 2015 profit forecasts, which sent its shares more than 3 per cent lower.
"We've seen a slowing in economic growth that was more than we expected," Chairman and Chief Executive Officer Doug Oberhelman said yesterday, according to Bloomberg News. "We think '13 could look like 2012 in terms of worldwide economic growth."