The final FOMC statement of the Bernanke era included nothing unexpected, which didn’t stop markets from expressing disappointment.
But looking ahead, there are at least two reasons why the Yellen Fed might soon consider, or at least should consider, downplaying the unemployment rate threshold in its forward guidance in favour of a greater emphasis on inflation. Read more
Taper yay or taper nay, FT Alphaville will be hosting a special edition of Markets Live this afternoon starting at 2:20pm EST (7:20pm in London). You can find us at the usual place.
We’ll discuss the FOMC statement and new economic projections before Bernanke’s presser begins at 2:30pm EST. Read more
The tweet-length translation of Wednesday’s FOMC statement:
“Sorry, but we’re saving any juicy taper-hint deets for the minutes, and otherwise we’ll see you in September.”
We’ll have a full discussion and live presser coverage starting at 2:25pm EST (6:25pm London time) on US Markets Live.
The new economic projection for the unemployment rate are a bit more optimistic than the December projections, and the central tendencies for GDP growth and inflation are slightly lower:
Overheard in the FT newsroom: “The market is violently unchanged on the FOMC statement.”
In other words, a bit of a snoozer, as expected. That said, there will be a few things to watch for when the minutes come out, as we noted last week. Read more
— Well, open-ended QE is what we anticipated, and open-ended QE is what we got — specifically an additional $40bn of monthly agency MBS purchases. And the purchases were indeed tied to economic outcomes, though in vague terms: Read more
“Leave us alone; we’re filling out our brackets.” — FOMC
We kid, but the statement was pretty much what we (and everyone else) expected. Read more
The real fireworks come later and we’ll have more detail on Markets Live as we cover the press conference, but in the meantime you’ll find the text below.
A few quick thoughts: Read more
The below is from the FT’s Money Supply blog that covers all things central banky.
So the Federal Reserve on Wednesday will publish forecasts which will show us how long it plans to keep rates at more-or-less zero. Hasn’t it done that already? Read more
Nothing to see here, catch you at the presser.
That seems to be the message of the FOMC statement, which included no meaningful new announcements. Read more
Heartbreaking. The FT’s Telis Demos points us in the direction of some barmy post-auction action in 30-year US Treasuries:
Looks like QE2.0 is going down a treat in the FX and bond markets.
First, 3-year, 5-year, and 10-year charts. Read more
It’s here! We’re saved!
Wait a minute…. Read more
First a reminder that we’re having a special edition of US Markets Live to cover the Bernanke presser starting at 2:05pm New York time (7:05pm in London).
The full FOMC statement is below. As expected, no change in rates. It includes an acknowledgment that economic growth has slowed more than anticipated, reflecting “in part factors that are likely to be temporary…”. Read more
To quote (again) a pint-sized musical firecracker from Minneapolis, this is what it sounds like when doves cry:
Call it a bland appetiser before the tastier main course.
Full release below. As to changes, there were only two — these two lines, in the first and second paragraphs respectively: Read more
The language remained nearly identical to the December statement except for a (dismissive) mention of commodity inflation and, of course, no dissenters. Here it is.
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward. Read more
The minutes from the FOMC’s meeting on December 14 are out.
At first glance there appear to be no hidden nuggets of insight, and the discussion of where the economy stood near the end 2010 makes for familiar reading: generally improving indicators tempered by ongoing worries about the housing market, deleveraging by households, and the unwillingness of corporate employers to use their cash piles to hire new workers. Read more
UPDATE: In our haste we posted the statement from December 3 earlier. Apologies.
Here is the right one: Read more