As expected, the Federal Open Market Committee under Ben Bernanke has voted to leave the Fed Funds Rate unchanged at the Target of 0.00% to 0.25%. The vote was 9 to 1 against a rate hike, again with Hoenig being the dissenting vote. We all know this is effectively ZERO on the rate front. We do have some of the comments out of the Fed, but we want to know what you think. Take our polling survey:
[polldaddy poll=3384403]
As far as rates, the “Exceptionally Low For Extended Period” remains the mantra and the Discount Rate remains unchanged at 0.75%. There is a relative downgrade to its economic outlook if you look at what was said. The ‘economic growth downgrade’ is the note that the economic recovery continues but at a moderate pace. The big difference between this FOMC call and other is that the FOMC now admits and recognized that the financial conditions outside of the US have become less supportive of economic growth.
They also believe that inflation will remain subdued for some time with the underlying inflation trending down. Household spending is increasing but spending remains at constrained levels. The FOMC also noted that the labor market is improving gradually although unemployment remains high. Business spending is up, but firms are still reluctant to make new job hires.
Hoenig was the dissenting vote and said that the “Extended Period” phrase limits the Federal Reserve’s economic policy flexibility in the future.
JON C. OGG
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
