The Federal Open Market Committee (FOMC) of the Federal Reserve today released its customary statement after its meeting.
Fed Chairman Ben Bernanke seems to have borrowed a page from Mervyn King, Governor of the Bank of England. King has made an art of playing a game with the markets by a lot of talk and very little new action. Now the Federal Reserve is following King’s footsteps.
There is nothing new in the Fed statement. The critical excerpt from the statement follows.
Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook. The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate. 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 expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
In the aftermath of the statement, gold, silver and bonds fell. The curve between 10-and 30-year bonds is steepening. The 10-year Treasury note now yields 2.13%.
The U.S. dollar is strengthening….Read more at Forbes
