Global| Dec 16 2009FOMC Notes Economic & Job Market Improvement But Leaves Rates Unchanged
by:Tom Moeller
|in:Economy in Brief
Summary
In an anticipated and unanimous vote, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The discount rate also was left unchanged at 0.5%. The action was as expected and left the [...]
In an
anticipated and unanimous vote, the Federal Open Market Committee today
left the Federal funds rate in a "range from 0 to 1/4 percent." The
discount rate also was left unchanged at 0.5%. The action was as
expected and left the Fed funds rate at its lowest level ever.
"Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating." Thus reads the opening statement from today's FOMC meeting press release. The statement then cites improvement in each of the economy's sectors; however, it notes that activity "is likely to remain weak for a time ..."
The
statement goes on to suggest that economic strengthening will
result from monetary & fiscal stimulus.
The Fed mentioned price inflation twice, indicating that "higher levels of resource utilization would occur in the context of price stability" and that "inflation will remain subdued for some time" as resource utilization remained low.
Again the Fed indicated that moderate economic growth and slack capacity utilization would allow rates to say low for an extended period of time. Also, "To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010."
A complete
text of the Fed's latest press
release can be found here.
The Haver databases USECON, WEEKLY and DAILY contain the figures from the Federal Reserve Board.
Supply and Demand Shocks in Residential Mortgages from the Federal Reserve Bank of Cleveland can be found here.
| Current | Last | December | 2008 | 2007 | 2006 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target) | 0.00 - 0.25 | 0.00 - 0.25 | 0.16 | 1.93 | 5.02 | 4.96 |
| Discount Rate, % | 0.50 | 0.50 | 0.50 | 2.39 | 5.86 | 5.96 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
