*Fed hints at more QE as economic recovery paused due to Hurricane Sandy
*QE to continue as long as unemployment remains above 6.5%
*Federal funds rate will remain at zero-.25% as long as unemployment remains above 6.5%
*The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate
Full January FOMC Statement is below:
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For immediate release
Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment has continued to expand at a moderate pace but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.
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Wow, who could have seen that coming? I mean its not as if QE to infinity is the only option left </Sarc>
The beatings (to the dollar) will continue til (financial) morale improves.
I THINK “WHEN” is starting to ARRIVE!
I don’t know about you astute posters out there, but personally, I’m waiting for Godzilla and Megalodon to come to our aid…
I’m betting on space aliens coming to our rescue… and they will need silver to power their trans-warp drives. :-)
The poop’s very parabolic arc, soon to transect the fan, looks much like the curve of the silver price. I’m long on baby wipes little bitty parasols or wide brimmed hats.
And goggles. Don’t forget the goggles! ;-)
Well I was hoping for a little more substance but now I’ll just wait for the smack down and I’ll be surprised if it doesn’t happen.
But maybe they have too much fiat printed already and don’t need to do a smack down. Wishful thinking. Lol
Smack down is tomorrow.
It will be interesting to see how the metals open tonight in the Asian markets. Today’s rally was a bit muted if you ask me and the mining indexes were down a bit today. They are not going to stop printing and we all know that. But has that been priced in?
Well guess what, FOMC … the unemployment rate can NEVER imporve while all your damnable interest-bearing credit notes are floating in circulation, because the world has hit the inevitable debt-saturation wall! Reasonable productive excess above the interest service fund creation has been surpassed and your asses are gored on the proverbial horns of dilemma.
Until cost-free (aka: metallic) money is re-instituted, (borrowing a famous phrase) ‘You’re Freakin’ DOOOOOOMED!!!’
Well Pat here’s a Tenner for now to keep you going
I did see a video of a matador who had that exact problem. OUCH!
Had to laugh at seeing that $10 US gold certificate. Can anyone imagine just how SMALL $10 worth of gold would be today? It would look a lot like a pin-head, if that. LOL
Charkes, every time I see that SOB, I thank God Burr rid us of him before he could have done much more harm.
Agreed, Pat. If only they had met even sooner!
http://www.news.net/article/127054/Top+StoriesFormer RBA Boss Charged Over Bank Note TheftsPublished: 02:48:51 AM, Thu 31 January 2013 EST
” the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities”
Translation: The Federal Reserve, an unregulated entity not subject to Congressional oversight, will continue to print USD out of thin air, buy Mr and Mrs John Q. Public’s home mortgages packaged as securities so that monthly payments go to THEM. Then when THEY raise interest rates and the Public’s can not make the payments, their home belongs to THEM. All financed by printing money out of thin air?
Compared to that BS, Bernie Madoff was a saint… and Jon Corzine a… nah, he’s still an a**hole by ANY definition.
@Thomas
“When through the process of law the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system we can get them to expend their energies in fighting for questions of no importance. It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.” – 1924 US Banker’s Association Magazine
As I characterize it … the Punch & Judy Puppet Show government actors put on a grand extravaganza in the town square whilst their banker cohorts roam through the transfixed crowds picking everyone’s pockets whistle-clean.