1 Aug 2013
Flash: September 18 meeting now focal point for Fed – Investec
FXstreet.com (New York) - The Fed kept policy on hold at its meeting last night as expected, sticking with $85bn/month of QE3 purchases and holding the Fed funds target rate at 0-0.25%, notes Jonathan Pryor, Corporate Treasurer at Investec.
Key quotes
However, “the statement did show the Fed modestly downgrading its assessment of the economy; rather than the 'moderate' expansion it reported in June, the Fed said that growth in the first half of the year had been 'modest'.”
The statement did also include a new line on inflation, saying the FOMC recognized 'inflation persistently below its 2% objective could pose risks to economic performance' but also indicated it expected inflation would track back to target.
“Overall however, the statement did not offer a radical shift from the June meeting, suggesting the FOMC is largely still happy with its plan to slow asset purchases this year - the statement does not appear to move the Fed away from a tapering of QE3 being announced at its September 18 meeting.”
Key quotes
However, “the statement did show the Fed modestly downgrading its assessment of the economy; rather than the 'moderate' expansion it reported in June, the Fed said that growth in the first half of the year had been 'modest'.”
The statement did also include a new line on inflation, saying the FOMC recognized 'inflation persistently below its 2% objective could pose risks to economic performance' but also indicated it expected inflation would track back to target.
“Overall however, the statement did not offer a radical shift from the June meeting, suggesting the FOMC is largely still happy with its plan to slow asset purchases this year - the statement does not appear to move the Fed away from a tapering of QE3 being announced at its September 18 meeting.”