Federal Reserve Stands Pat, Markets Consolidate
As expected, the Federal Reserve did not make any changes to its existing set of monetary policies at today’s Federal Open Market Committee (FOMC) meeting. Chairman Ben Bernanke and his colleagues at the U.S. central bank chose to keep their open-ended third round of quantitative easing (QE3) at $40 billion per month, reiterated their plan to continue with Operation Twist through the end of the year, and reaffirmed their commitment to a near zero Federal Funds rate through at least mid-2015.
Once again, Richmond Fed President Jeffrey Lacker was the only dissenter, as he “opposed additional asset purchases and disagreed with the description of the time period over which a highly accommodative stance of monetary policy will remain appropriate and exceptionally low levels for the federal funds rate are likely to be warranted.”
The only noteworthy differences – which, albeit, were modest – revolved around the Fed’s characterization of recent U.S. economic activity. The FOMC statement noted that “household spending has advanced more quickly, but growth in business fixed investment has slowed.”
In addition, “inflation recently picked up somewhat, reflecting higher energy prices” as opposed to being “subdued” during the past statement. However, the Fed reiterated that “longer-term inflation expectations have remained stable.”
(For analysis and commentary of the Fed’s impact on precious metals and gold stocks, visit GoldAlert Pro at http://pro.goldalert.com )
Financial markets in general showed a muted response to the Fed’s decision, as follows:
- Gold futures remained slightly lower near $1,703 per ounce, while silver held near $31.75 per ounce
- U.S. Dollar Index (DXY) held near unchanged at 79.975
- S&P 500 Index remained up by 0.1% near 1,415
2012-10-25 02:20:13
Source: http://www.goldalert.com/2012/10/federal-reserve-stands-pat-markets-consolidate/
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