As expected, the Federal Reserve on Wednesday voted to maintain their $85 billion per month asset purchase program. Policy makers remain nervous about the health of the economy, fearing the recent government shutdown has hurt an already tepid recovery. The Fed explained its decision in a statement following its two-day meeting -- there is no press briefing with Chairman Ben Bernanke this month. Information received since the Federal Open Market Committee met in September generally suggests that economic activity has continued to expand at a moderate pace, the statement read. The Fed noted that unemployment rate remains elevated and the recovery in the housing sector has slowed somewhat in recent months. The decision to stay the course on QE3 comes as no surprise to economists, most of whom have backed well off predictions the Fed would tighten policy in the second half of 2013. On a positive note, the Fed judged that downside risks to the outlook for the economy and the labor market as having diminished, on net, since a year ago. Still, light of a string of disappointing economic data, most Fed watchers now anticipate the central bank will not begin tapering until sometime in 2014. Payrolls processor ADP said today the private sector added 130,000 jobs in October following a downwardly revised increase of 145,000 jobs in September. Separately, the Labor Department said U.S. consumer prices rose in September, with the CPI gauge up a modest 1.5%. Tame inflation gives the Fed room to keep their ultra-loose monetary policy in place for the foreseeable future.
Posted on: Wed, 30 Oct 2013 18:24:23 +0000
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