Global| Sep 22 2010U.S. Fed Funds Interest Rate Held Stable
by:Tom Moeller
|in:Economy in Brief
Summary
At yesterday's meeting of the Federal Open Market Committee, the Federal Funds rate was held at 0.125% where it has been since December 2008. The discount rate also was held constant at 0.75%. In the Fed's statement released after the [...]
At yesterday's meeting of the Federal Open Market Committee, the Federal Funds rate was held at 0.125% where it has been since December 2008. The discount rate also was held constant at 0.75%. In the Fed's statement released after the meeting, it indicated that the "pace of the recovery in output and employment has slowed in recent months." Regarding inflation, the Fed indicated that "With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate."
Financial market indicators recently have flashed conflicting signals, despite the low inflation environment. The interest rate yield curve has narrowed as the rate on 10-Year Treasury notes has fallen to 2.72% from the April high of 3.85%. Conversely, the foreign exchange value of the U.S. dollar is off 6.0% from its recent peak during June. Growth in the money supply (M2) decelerated to 0.9% over the past 13 weeks from 1.7% reached during July. Perhaps that reflects some lethargy in money demand due to weaker consumer spending. Similarly, growth in the monetary base has slowed considerably.
The financial market data can be found in Haver's WEEKLY database.
The Fed's statement following yesterday's FOMC meeting can be found here.
| Financial Market Indicators | 09/22/10 | 08/10 | 12/09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|
| Fed Funds Rate | 0.13% | 0.13% | 0.13% | 0.13% | 2.08% | 5.05% |
| 10 Year Treasury Note | 2.72 | 2.70 | 3.59 | 3.26 | 3.66 | 4.63 |
| Money Supply - M2 (13 Week) | 0.91 | 0.94 | 1.05 | 7.9 | 7.1 | 6.4 |
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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