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Fed Maintains Current Bond-Buying Program

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  • Description

    FBN's Peter Barnes breaks down the Federal Reserve announcement.

  • Duration 3:39
  • Date

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Really been -- at what point should they start.

No change in fed policy no change in fed policy quantitative easing continues with no change in short term interest rates will rise to the economic analysis of the latest FOMC statement.

Quote information received since the Federal Open Market Committee met in December suggests that growth and economic activities paused in recent months.

In large part because of weather related disruptions and other transitory factors.

Employment has continued to expand at a moderate pace but the unemployment rate remained elevated household spending and business fixed investment advanced and the housing sector has shown further improvement and inflation has been running somewhat below the committee's -- -- apart from temporary or variations that largely reflect fluctuations.

In the energy prices longer term inflation expectations have remained stable the committee expects that with -- appropriate policy accommodation to economic growth will proceed at a moderate pace and the unemployment rate will gradually decline towards levels -- committee judges consistent with a dual mandate almost the strains in global financial markets that he.

Ease somewhat the committee continues to see downside risks to the economic outlook the committee also anticipates that inflation over the medium -- are more likely run at or below its 2% objective to support a stronger economic recovery and to help ensure that inflation over time is that -- at a rate most consistent with a dual mandate the committee will continue purchasing additional agency mortgage backed securities at a pace of thirty billion dollars per month and longer term treasury securities at a pace of forty.

Five billion per month these actions should maintain downward pressure on longer term interest -- support mortgage market and help to make the broader financial conditions more accommodate that the committee also closely monitor incoming information on economic and financial developments in coming months.

If -- outlook for the labour market does not -- substantially the committee will continue its purchases of treasury and agency mortgage backed securities and -- -- other policy -- -- appropriate until -- improvement has -- -- the cost of price stability to support continued progress -- maximum employment and price stability the committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program -- and the economic recovery strengthened in particular the committee decided to keep the target rate for a federal -- at zero to a quarter percent -- currently anticipates that this exceptionally low range of the federal funds rate will be appropriate at least as long as the unemployment rate remains -- Inflation between one and two years ahead of its -- it is as projected being no more.

And a half a percentage point above the committee's 2% longer run -- and longer term inflation expectations continue to be well anchored in determining how long to continue highly accommodative stance of monetary policy the committee will also consider other information.

Including additional measures -- the labor market conditions indicators of inflation pressures and a -- expert.

Patient and reading down financial development when the committee decides to begin to remove policy accommodation.

It -- take a balanced approach consistent with -- longer -- goals of maximum employment and inflation of 2% the vote on this policy statement today it was eleven to one with one of the new members.

-- FOMC Esther George that president of the Kansas City Federal Reserve voting against this policy action she said she was quelled concern that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and over -- could cause an increase in long term.

Inflation expectations.

Bonds were -- from the treasury back to you -- New York.

-- thank you very much so.

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