Wednesday, January 25, 2012

The results of the FOMC; Defended Low U.S. Interest Rates

FOMC
Wednesday, the Free Market Committee Federal Reserve or the Federal Open Market Committee's issued a statement on interest rate policy.
Various information received by the Commission at a meeting of the Free Market last December suggested that the economy has experienced moderate growth, amid slowing global economic growth. Where some indicators show a higher rise above the conditions of labor markets, unemployment is still rising. Household spending continued to increase despite growth in business fixed investment, although growth is still slow, and the housing sector is still very depressed. Inflation softened in recent months and is expected in the long run inflation will be stable.

Consistent with the task assigned, the Commission will also encourage the creation of maximum employment and price stabilization. The Commission hopes that economic growth in the next few quarters will rise and prepare for the possibility of growth the unemployment rate will decrease slowly in stages in which the commission tried to be consistent with this dual mandate. Pressures that hit global financial markets continue to exert pressure for economic projections. Komis react to that in the next few quarters, inflation will be at current levels or lower according to the dual role of the Commission.

In order to support economic recovery and help control inflation, currently, the commission will conduct an accommodative monetary policy. In this regard, the Commission decided to keep the rate at 0 to 1 / 4 percent and do anticipate a variety of economic conditions, including the utilization of these low interest rates and keeping inflation in the short term, low interest rates is a thing which can not deny at least until 2014.
The commission decided to continue the program for this as stated in September last. It also establish policies that already exist at this time to reinvest principal payments from the company's agency debt and agency mortgage-based securities in the housing credit agencies based securities and securities rolling bonds will mature in the auction. The commission also will periodically conduct a review of the size and composition of securities companies and prepare for the addition of these companies as a support to promote a strong economic recovery in the context of price stabilization.

Central bank officials who supported this decision is the result of Ben S. Bernanke, Governor of the Central Bank; William C. Dudley, Deputy Governor of Central Bank of the United States; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo: John C. Williams, and Janet L. Yellen. While that does not agree with this decision is Jeffrey M. Lacker, who argued that he was more emphasis on descriptions periodeisasi-time than the condition of the economic conditions that seem to make low interest rate policy at this time as something that can not be avoided. (HQM)
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