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Economy in Brief

FOMC Indicates Securities Purchases Will Continue
by Tom Moeller  October 24, 2012

As expected, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The Fed funds rate has remained unchanged since late-2008 at its lowest level ever. The discount rate also was left unchanged at 0.75%. The Fed indicated that the economy may warrant an exceptionally low Fed funds rate at least through late 2014.

Confirming recent action, "... the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.  The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities ..."

Regarding the economy, "The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.  Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook".

As for inflation, "Inflation recently picked up somewhat, reflecting higher energy prices.  Longer-term inflation expectations have remained stable."

The press release for today's FOMC meeting can be found here.

The Haver databases USECON, WEEKLY and DAILY contain the figures from the Federal Reserve Board.

  Current Last 2011 2010 2009 2008
Federal Funds Rate, % (Target 0.00-0.25 0.00-0.25 0.10 0.17 0.16 1.93
Discount Rate, % 0.75 0.75 0.75 0.72 0.50 2.39
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