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The world economy is expected to bounce back in 2010 with Asian economies continuing to pace global growth. Among the industrialized nations, the United States, where the financial system and labor market are showing signs of stabilization, will outpace Europe where stubbornly high unemployment is likely to sap the strength of recovery.

According to the International Monetary Fund's World Economic Outlook, the global output is expected to grow by 3.1 percent in 2010, with much of the recovery driven by emerging economies. The United Nations also expects the world economy to resume growth in 2010, but it warned that the recovery will be fragile.

On the upside, the U.N. report, World Economic Situation and Prospects for 2010, cheered increased industrial production, a rebound in global equity markets and a rise in international trade.

"This is an important turnaround after the free fall in world trade, industrial production, asset prices, and global credit availability which threatened to push global economy into the abyss of a new Great Depression in early 2009," the U.N. said.
"Our biggest challenge now is growth and bringing down unemployment". "That's our overwhelming challenge. Nothing is possible without that."

By doing so, the Fed hopes to entice Americans and U.S. businesses to boost spending, which would help the recovery.