Today marks the end of the final Federal Reserve, Federal Open Market Committee (FOMC) meeting for Ben Bernanke, with the baton now being passed to Janet Yellen who officially starts on February 1st.
At the December meeting, the committee began tapering down its quantitative easing (QE) program, cutting back on monthly purchases of U.S. Treasury and mortgage backed securities (MBS) by $10 billion to $75 billion as the American economy continues to grow. Interest rates have also been held near zero since the 2008/09 financial crisis.
Expectations are for an announcement later today that the purchases will be cut by a further $10 billion today and at each subsequent meeting with the programme likely to end by the end of 2014. With manufacturing, retail sales, industrial production and a likely strong Q4 2013 GDP number it seems unlikely that Bernanke and the rest of the committee will change tack from tapering despite a weak non-farm payrolls number earlier this month.
The question that many are asking is whether the Federal Reserve will adjust its 6.5% unemployment threshold for lifting interest rates, unemployment hit 6.7% in December.
There is little doubt that the U.S.. economy is now on a strong positive trajectory with the fourth quarter 2013 GDP growth came number likely to come at in at a 3.3% annual rate on Thursday and perhaps as high as 4.2%. Not bad for a so called “developed economy”.
Contrarian Investor UK
by contrarianuk
Federal Reserve FOMC meeting announcement in focus today for confirmation of further QE tapering
Jan 29, 2014 at 6:07 am in Market Commentary by contrarianuk
Today marks the end of the final Federal Reserve, Federal Open Market Committee (FOMC) meeting for Ben Bernanke, with the baton now being passed to Janet Yellen who officially starts on February 1st.
At the December meeting, the committee began tapering down its quantitative easing (QE) program, cutting back on monthly purchases of U.S. Treasury and mortgage backed securities (MBS) by $10 billion to $75 billion as the American economy continues to grow. Interest rates have also been held near zero since the 2008/09 financial crisis.
Expectations are for an announcement later today that the purchases will be cut by a further $10 billion today and at each subsequent meeting with the programme likely to end by the end of 2014. With manufacturing, retail sales, industrial production and a likely strong Q4 2013 GDP number it seems unlikely that Bernanke and the rest of the committee will change tack from tapering despite a weak non-farm payrolls number earlier this month.
The question that many are asking is whether the Federal Reserve will adjust its 6.5% unemployment threshold for lifting interest rates, unemployment hit 6.7% in December.
There is little doubt that the U.S.. economy is now on a strong positive trajectory with the fourth quarter 2013 GDP growth came number likely to come at in at a 3.3% annual rate on Thursday and perhaps as high as 4.2%. Not bad for a so called “developed economy”.
Contrarian Investor UK