Fed Maintains QE Bond Buying at 85 Billion a Month

The Federal Reserve on Wednesday said risks to the outlook for the U.S. economy and job market had eased since last fall, but it said it would keep buying $85 billion in bonds per month given the still-high level of unemployment.

Describing the economy as expanding moderately, Fed officials cited further improvement in the labor market and the housing sector, even as they noted that inflation was running below their 2 percent long-term goal.

In a statement after a two day meeting, the Fed’s policy-setting panel offered a more upbeat assessment of the risks facing the economy than they had after they last met in May.

“The committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall,” the Fed said.

U.S. stocks slipped, the dollar rose to session highs against both the yen and the euro, and U.S. rate futures fell as traders saw the statement as a small step toward an eventual reduction in the central bank’s pace of bond buying.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza