The Federal Reserve Open Market Committee notes were issued today and the agency said the economy was once again in nearly dire straights. “The pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.”
The note also stated that “Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months.”
But, the Fed did not panic in the face of what could be the beginning of a new drop in GDP.
“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holding.”
In other words, the Fed will do nothing.
Douglas A. McIntyre
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