Recent Updates

  • Euro area: Bank Lending Survey (Q1); Consumer Confidence (Jan-Flash)
  • Greece: Travel Balance of Payments (Nov)
  • Turkey: Consumer Confidence (Jan); Israel: Exports of Services (Nov); South Africa: Business Cycle Indicators (Nov); Qatar: Real Estate Price Index (Dec), Banks Monthly Statements (Dec); Kenya: Foreign Trade, Depository Corporation Survey (Nov)
  • Kazakhstan: Bank Loans, Lending and Deposit Rates, Bank Loans by Type, Banking System Monetary Survey, Monetary Aggregates (Dec);
  • more updates...

Economy in Brief

FOMC Will Continue Accommodation Until Labor Market Improves Further
by Tom Moeller  January 30, 2013

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%. As it did at the last meeting, the Fed indicated "that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."

Regarding the economy, the Fed stated "... growth in economic activity 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 remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable."

Downside risks to economic growth and inflation were voiced. "Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective."

Repeating the statement from the last meeting, "... the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month."

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

Haver's SURVEYS database contains the projections from the Federal Reserve Board. The economic data can be found in Haver's USECON database. 

  Current Last 2012 2011 2010 2009
Federal Funds Rate, % (Target 0.00-0.25 0.00-0.25 0.14 0.10 0.17 0.16
Discount Rate, % 0.75 0.75 0.75 0.75 0.72 0.50
close
large image