18 Sep 2013
The Fed decides to maintain the status quo; No taper
FXstreet.com (San Francisco) - The Federal Reserve has decide to maintain its interest rate unchanged at 0.25%. Same story with the bond buying pace at $85Bn as officials need more information that the economy is growing at a sustainable pace.
According to a recent press release, the Fed affirms that the pace of bond purchases depends on the economic outlook. The inflation is still low, financial market conditions are tight while the fiscal retrenchment could be damaging, so the FOMC needs more signs of progress.
"Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month."
The Fed has lowered its growth expectations and now officials forecast the US GDP to slowdown in 2016 to 2.5%-3.3% range, from 3.0%-3.5% in 2014. They see 2013 to show a 2.0%-2.3% growth in the United States.
The unemployment rate is expected to finish the year around 7.2%-7.3% and to decline to 6.5%-6.8% in 2014, 5.8%-6.2% in 2015 and 5.4%-5.9% in 2016.
According to a recent press release, the Fed affirms that the pace of bond purchases depends on the economic outlook. The inflation is still low, financial market conditions are tight while the fiscal retrenchment could be damaging, so the FOMC needs more signs of progress.
"Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month."
The Fed has lowered its growth expectations and now officials forecast the US GDP to slowdown in 2016 to 2.5%-3.3% range, from 3.0%-3.5% in 2014. They see 2013 to show a 2.0%-2.3% growth in the United States.
The unemployment rate is expected to finish the year around 7.2%-7.3% and to decline to 6.5%-6.8% in 2014, 5.8%-6.2% in 2015 and 5.4%-5.9% in 2016.