As expected, despite a belief that rates need to rise from here, the FOMC announced decision on interest rates leaves the 0.0% to 0.25% Fed Funds rate target unchanged. A 9-1 vote, with Hoenig as the dissent vote, will leave the near-zero rate policy intact. The note was there that Fed Funds Will Stay Exceptionally Low For AN Extended Period…. As far as the Fed’s exit strategy, the Fed will end the mortgage purchasing on March 31.
The FOMC gave many notes, as follows:
- Economic activity has continued to strengthen;
- Labor markets are stabilizing, but hiring decisions are reluctant;
- Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit;
- Recovery will be moderate for some time;
- Inflation expected to remain subdued for some time;
- Longer-term inflation expected to remain subdued for some time;
- Business spending is significantly higher in equipment and software;
- Financial markets remain supportive of growth;
- Housing starts have been flat at a depressed level.
If you are a true Fed-head, the full statement is here.
JON C. OGG
Top Gaining Stocks
Top Losing Stocks