Europe debt crisis shadows Fed meeting on economy

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Europe debt crisis shadows Fed meeting on economy

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Greek default could derail a still fragile economy in the United States and elsewhere.

21 June,2011 02:09 pm

If the US economic slowdown werent enough to deal with, the Federal Reserve this week must consider a new threat: a resurgent European debt crisis that could imperil the global economy.Financial markets have been gripped by fears that Greece will default on its debt and infect other economies. Those worries eased over the weekend as prospects for a rescue appeared to brighten. Still, the crisis has renewed fears that a Greek default could derail a still fragile economy in the United States and elsewhere.Some analysts suggest that a panic would cause the Federal Reserve to intervene as it did during the 2008 financial crisis, when it lent billions to banks.