Posted on 10/29/2014 3:37:53 PM PDT by TigerLikesRooster
Fed decides to keep near-zero interest rate for 'considerable time' after ending QE
2014/10/30 04:26
WASHINGTON, Oct. 29 (Yonhap) -- The U.S. Federal Reserve announced Wednesday it will keep its near-zero interest rate policy "for a considerable time" even as it puts an end to its bond-purchasing program aimed at stimulating the economy through low rates.
The announcement corroborates views that the Fed is unlikely to raise the key rate before the middle of next year. A possible U.S. rate hike after the end of the bond-buying program, known as "quantitative easing," has been feared to lead to a capital flight from economies like South Korea.
"To support continued progress toward maximum employment and price stability, the committee today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate," the Fed said in a statement after a Federal Open Market Committee meeting.
"The committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 0.25 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month," it said.
As to the timing of a possible rate hike, the Fed said it will assess progress toward its objectives of maximum employment and 2 percent inflation after taking into account such factors as measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments.
The Fed's decision to end the quantitative easing program this month had been expected because it had gradually been tapering off its monthly bond purchases from US$85 billion to $15 billion.
As reasons for the program's conclusion, it cited "a substantial improvement in the outlook for the labor market" and "sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability."
"Accordingly, the committee decided to conclude its asset purchase program this month," it said.
P!
ping
“maximum employment”
That is a laugh, it was reported recently that foreign born “workers” in this country have broken a record at 25 million. Maximum employment is an Agenda 21 term, America is being fleeced and the lambs cannot see it.
Uh huh...until a GOP controlled Congress or President
This leads to the continued destruction of savings, among other things.
Fed move = desperation to get economy jumpstarted. Funny how I keep on running into younger unemployed workers and none of them have anything nice to say about the black celebrity god they voted 6 years ago. Thank you Obam for showing the youth firsthand how socialism is just a con artist game that’s used on the less experienced and naive people of a nation to put elitetists in power and enslave everyone else.
Wouldn’t want us poor suckers with savings to get ahead would they?
“Uh huh...until a GOP controlled Congress or President “
The Fed began that near zero interest rate policy at the beginning of Dubya’s term and that included a GOP Congress. There wasn’t a peep out of them.
The ‘punish the savers’ program has been alive and well since 2001 with no end in sight.
why should there have been? The problem was not lowering interest rates during a crash. we had 9/11 and later the Iraq war during that period. The problem IMO is leaving the “emergency” rates in place for over a decade. This government seems incapable of discontinuing emergency policies
Saving is future oriented. They believe that future orientation is racist. Seriously.
we went thru a whole bunch of trouble and time to refi our home eq loan, fearing raising rates.....we sure got fooled...but actually, it does give piece of mind...
“why should there have been? “.
The main lesson of Austrian School economic theory is that artificially depressing the interest rate is the driving force behind boom and bust.
We got a real world test of that theory when Greenspan began a ZIRP program in 2001, and kept it in place for years.
That near zero interest rate policy allowed vast amounts of money to be raised because it cost virtually nothing. And that money flowed into the housing sector, creating one of the biggest and most unstable bubbles in financial history.
This policy simply rewards government waste and spendthrift.
That’s because the Fed has no freaking idea of what to do about the economic mess they have created. They know we are headed for a terrible crash and they cannot stop it.
They are almost admitting that carry trade unwinding destroys the world economy and by extension our own economy. Then they would have to admit that low rate policies lead to speculative bubbles like the carry trade and do nothing to help our economy.
Perhaps. But they can postpone it indefinitely and make it that much worse by postponing bank restructuring and piling on the debt.
Well they are postponing it for awhile but not indefinitely.
Is there a peep out of any GOP politicians now, or are they too busy spending the money that the Fed printed for them? They will print more in QE4, or perhaps just backchannel the money via “Belgian” purchases of US treasuries.
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