Global| Dec 12 2012FOMC Will Continue Accommodative Policy and Asset Purchases
by:Tom Moeller
|in:Economy in Brief
Summary
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 [...]
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 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."
Moreover, "... the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month."
Regarding the economy, "Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed". As for prices, "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."
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 | 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 |
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.
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