Fed Still Running Money Machines Full Steam
May 1, 2013 by Sam Rolley
At this point it probably no longer qualifies as news, but for what it’s worth: Federal Reserve officials decided during the central bank’s Federal Open Markets Committee meeting this week to continue keeping interest rates low and making monthly $85 billion bond purchases.
Notable of the most recent FOMC meeting, however, is that, unlike at its last meeting, officials seem to agree that its long-standing low-interest, money-pumping policy should continue for the time being — but with the caveat the Fed ready itself to increase or draw down its economic meddling as conditions evolve.
“The committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes,” the FOMC today in conclusion of its two-day meeting.
Analysts say the announcement could be a sign that the Fed is trying to hedge against widespread economic volatility.
The statement gives them flexibility on the upside and the downside,” John Silvia, chief economist at Wells Fargo Securities LLC, told Bloomberg. “The whole debate had centered on when to taper off. Given some of the latest data, the Fed could be more aggressive in its policy.”