Global| Jan 29 2014FOMC Pares Back the Rate of Liquidity Provision
by:Tom Moeller
|in:Economy in Brief
Summary
At today's meeting of the Federal Open Market Committee, the Fed "decided to make a further measured reduction in the pace of its asset purchases. Beginning in February, the Committee will add to its holdings of agency mortgage-backed [...]
At today's meeting of the Federal Open Market
Committee, the Fed "decided to make a further measured reduction in
the pace of its asset purchases. Beginning in February, the Committee will
add to its holdings of agency mortgage-backed securities at a pace of $30
billion per month rather than $35 billion per month, and will add to its
holdings of longer-term Treasury securities at a pace of $35 billion per
month rather than $40 billion per month."
The Federal funds rate was left unchanged in a range of 0.00% - 0.25% and the discount rate remained at 0.75%.
"The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent 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, it has "picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate declined but remains elevated. Household spending and business fixed investment advanced more quickly in recent months, while the recovery in the housing sector slowed somewhat. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing."
"Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable."
The press release for today's FOMC meeting can be found here.
Haver's SURVEYS database contains the projections from the Federal Reserve Board.
| Current | Last | 2013 | 2012 | 2011 | 2010 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target) | 0.00-0.25 | 0.00-0.25 | 0.11 | 0.14 | 0.10 | 0.17 |
| Discount Rate, % | 0.75 | 0.75 | 0.75 | 0.75 | 0.75 | 0.72 |
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.
