Actually, what´s the target of FED´s policy now ?

Discussion in 'Economics' started by ASusilovic, Sep 21, 2010.

  1. WASHINGTON (MarketWatch) — The following is the text of the Federal Open Market Committee’s decision on interest rates:

    Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term. See story on Fed's decision.

    Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. 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.

    The Committee will maintain the target range for the federal funds rate at 0 to 0.25% and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.

    The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

    Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth. In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee’s policy objectives.

    http://www.marketwatch.com/story/text-of-fomc-decision-on-interest-rates-2010-09-21
     
  2. Tsing Tao

    Tsing Tao

    the target of their policy? to try to create inflation as best as they can. so promise to print until inflation happens.

    of course, we'll get asset price inflation through commodities and no WAGE inflation, so nothing will work.

    for a room full of academics, they are incredibly dim to what is happening
     
  3. Good for us. We just keep trading this.
     
  4. the current target S&P 1300
     
  5. Did you see the spike in metal prices right after the announcement? A lot of traders seem able to filter out the filler for the facts pretty quickly.
     
  6. Oh, I don't know. It seems fitting for a bunch of academics...at least for a bunch of self-absorbed Keynesians with no clue what's really going on.
     
  7. Tsing Tao

    Tsing Tao

    thing is, i have to believe its malevolence, not ignorance. they cannot be missing what we as couch quarterbacks are seeing. they just either dont agree or agree and are complicit based on what they want to happen.

    so the question is about figuring out their grand scheme of thievery.
     
  8. It's about keeping Washington D.C. and New York alive and well, at all costs, to the rest of the country. Just a continued consolidation of power.
     
  9. S2007S

    S2007S

    Here we are at another meeting where bubble ben bernanke continues to anything possible to spur growth.....

    The pieces of the puzzle never fall where they should with this type of intervention involved in the free markets.



    The Federal Reserve said it’s willing to ease monetary policy further to spur growth and support prices while refraining today from expanding its holdings of securities.

    “The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Open Market Committee said today in a statement in Washington.
     
  10. The target is to debase the dollar and devalue the debt faster than it is being piled up.

    If the dollar is not devalued, unemployment will get even worse.
     
    #10     Sep 22, 2010