Global| Dec 18 2013FOMC Will Reduce the Rate of Asset Purchases
by:Tom Moeller
|in:Economy in Brief
Summary
At today's meeting of the Federal Open Market Committee the Fed elected to begin reducing, in January, its purchases of agency mortgage-backed and Treasury securities to $75 billion per month from $85 billion per month. The Fed [...]
At today's meeting of the Federal Open Market Committee the Fed elected to begin reducing, in January, its purchases of agency mortgage-backed and Treasury securities to $75 billion per month from $85 billion per month.
The Fed nevertheless "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."
The economic outlook was unchanged. "The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate of maximum employment and price stability."
The perspective on the current economy also was unchanged from "activity is expanding at a moderate pace. Labor market conditions have shown further improvement; the unemployment rate has declined but remains elevated. Household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth, although the extent of restraint may be diminishing."
Regarding prices, "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 economic projections from the Federal Reserve Board.
| 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 |
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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