October 29, 2014
- in Uncategorized by schooloftrade
FOMC Announcement: Fed holds rates unchanged and maintains ‘considerable time’ for raising rates
(US) FOMC HOLDS FED FUNDS RATE TARGET AT 0.25%:
FED COMPLETES TAPER OF BOND
PURCHASES, AS EXPECTED; MAINTAINS “CONSIDERABLE TIME” LANGUAGE
PURCHASES, AS EXPECTED; MAINTAINS “CONSIDERABLE TIME” LANGUAGE
– Vote 9-1: (The committee) believed that, in light of
continued sluggishness in the inflation outlook and the recent slide in
market-based measures of longer-term inflation expectations, the Committee
should commit to keeping the current target range for the federal funds rate at
least until the one-to-two-year ahead inflation outlook has returned to 2
percent and should continue the asset purchase program at its current level.
(Reminder: Fisher and Plosser dissented at last meeting)
continued sluggishness in the inflation outlook and the recent slide in
market-based measures of longer-term inflation expectations, the Committee
should commit to keeping the current target range for the federal funds rate at
least until the one-to-two-year ahead inflation outlook has returned to 2
percent and should continue the asset purchase program at its current level.
(Reminder: Fisher and Plosser dissented at last meeting)
– Economic activity is expanding
at a moderate pace. Labor market conditions improved somewhat further, with
solid job gains and a lower unemployment rate.
at a moderate pace. Labor market conditions improved somewhat further, with
solid job gains and a lower unemployment rate.
On balance, a range of labor
market indicators suggests that underutilization of labor resources is
gradually diminishing. Household spending is rising moderately and business
fixed investment is advancing, while the recovery in the housing sector remains
slow. Inflation has continued to run below the Committee’s longer-run
objective. Market-based measures of inflation compensation have declined
somewhat; survey-based measures of longer-term inflation expectations have
remained stable.
The Committee sees the risks to
the outlook for economic activity and the labor market as nearly balanced.
Although inflation in the near term will likely be held down by lower energy
prices and other factors, the Committee judges that the likelihood of inflation
running persistently below 2 percent has diminished somewhat since early this
year.
the outlook for economic activity and the labor market as nearly balanced.
Although inflation in the near term will likely be held down by lower energy
prices and other factors, the Committee judges that the likelihood of inflation
running persistently below 2 percent has diminished somewhat since early this
year.
The Committee judges that there
has been a substantial improvement in the outlook for the labor market since
the inception of its current asset purchase program. Moreover, the Committee
continues to see sufficient underlying strength in the broader economy to
support ongoing progress toward maximum employment in a context of price
stability.
has been a substantial improvement in the outlook for the labor market since
the inception of its current asset purchase program. Moreover, the Committee
continues to see sufficient underlying strength in the broader economy to
support ongoing progress toward maximum employment in a context of price
stability.
Accordingly, the Committee
decided to conclude its asset purchase program this month. The Committee is
maintaining its existing policy of reinvesting principal payments from its
holdings of agency debt and agency mortgage-backed securities in agency
mortgage-backed securities and of rolling over maturing Treasury securities at
auction. This policy, by keeping the Committee’s holdings of longer-term
securities at sizable levels, should help maintain accommodative financial
conditions.
decided to conclude its asset purchase program this month. The Committee is
maintaining its existing policy of reinvesting principal payments from its
holdings of agency debt and agency mortgage-backed securities in agency
mortgage-backed securities and of rolling over maturing Treasury securities at
auction. This policy, by keeping the Committee’s holdings of longer-term
securities at sizable levels, should help maintain accommodative financial
conditions.
The Committee anticipates, based
on its current assessment, that it likely will be appropriate to maintain the 0
to 1/4 percent target range for the federal funds rate for a considerable time
following the end of its asset purchase program this month, especially if
projected inflation continues to run below the Committee’s 2 percent longer-run
goal, and provided that longer-term inflation expectations remain well
anchored.
on its current assessment, that it likely will be appropriate to maintain the 0
to 1/4 percent target range for the federal funds rate for a considerable time
following the end of its asset purchase program this month, especially if
projected inflation continues to run below the Committee’s 2 percent longer-run
goal, and provided that longer-term inflation expectations remain well
anchored.
However, if incoming information
indicates faster progress toward the Committee’s employment and inflation
objectives than the Committee now expects, then increases in the target range
for the federal funds rate are likely to occur sooner than currently
anticipated. Conversely, if progress proves slower than expected, then
increases in the target range are likely to occur later than currently
anticipated.
indicates faster progress toward the Committee’s employment and inflation
objectives than the Committee now expects, then increases in the target range
for the federal funds rate are likely to occur sooner than currently
anticipated. Conversely, if progress proves slower than expected, then
increases in the target range are likely to occur later than currently
anticipated.
The Committee currently
anticipates that, even after employment and inflation are near
mandate-consistent levels, economic conditions may, for some time, warrant
keeping the target federal funds rate below levels the Committee views as
normal in the longer run.
anticipates that, even after employment and inflation are near
mandate-consistent levels, economic conditions may, for some time, warrant
keeping the target federal funds rate below levels the Committee views as
normal in the longer run.
– SourceTradeTheNews.com
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