The US Federal Reserve said the economy is doing a little better but noted significant downside risks from the eurozone crisis and kept monetary policy firmly on hold, the FT reports. Its statement on Tuesday, little changed since November’s, means that the rate-setting Federal Open Market Committee will hold fire on any further easing and await developments in the new year. The FOMC is caught between stronger economic data in the US and uncertainty about what will happen in Europe. Recent data on consumption and business confidence has raised hopes of stronger growth next year but much depends on whether Congress extends a 2 percentage point reduction in payroll taxes into 2012. The Fed is taking advantage of a quieter period to work on changes to its communication policy including the possible adoption of an explicit numerical objective for inflation.

This entry was posted by Cardiff Garcia on Tuesday, December 13th, 2011 at 21:37 and is featured in The 6am Cut London (14 Dec 2011), The Closer (13 Dec 2011) . Tagged with Fed. Edit this entry.