Fed Leaves Policy Unchanged Despite Stronger Growth

@AFP
Fed Leaves Policy Unchanged Despite Stronger Growth

Washington (AFP) — The Federal Reserve on Wednesday stuck to its plan of holding its base interest rate near zero while steadily trimming its stimulus, despite a surprisingly strong second-quarter economic growth report.

The Fed as expected reduced its monthly bond purchases by $10 billion, taking the program to $25 billion a month, but said the low federal funds rate remains needed to support growth and improvement in the labor market.

In a statement at the end of a two-day policy meeting, the Federal Open Market Committee acknowledged that the economy shows “sufficient underlying strength” to support the recent gains in job creation and cutting unemployment.

However, it also suggested continued disappointment with the state of the jobs market, saying that various data “suggests that there remains significant underutilization of labor resources.”

But in a significant shift that recognizes the gains in the economy, the FOMC dropped its previous expression of concern over low inflation.

“The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below two percent has diminished somewhat.”

The statement came shortly after the Commerce Department reported that the economy grew at a 4.0 percent annual rate in the second quarter, rebounding solidly from the first quarter’s sharp contraction.

AFP Photo/Karen Bleier

Interested in economic news? Sign up for our daily email newsletter!

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

With Passage Of Aid Bill, It's Ukraine 1, Putin Republicans 0

Presidents Joe Biden and Volodymyr Zelensky outside Mariyinski Palace in Kyiv, Ukraine on February 20, 2023

That whisper of wind you heard through the budding leaves on trees this afternoon was a sigh of relief from soldiers on the front lines in Luhansk and Donetsk and Zaporizhzhia as the House of Representatives overcame its Putin wing and passed the $95 billion aid package which included $61 billion in aid to Ukraine.

Keep reading...Show less
As Nebraska Goes In 2024, So Could Go Maine

Gov. Jim Pillen

Every state is different. Nebraska is quite different. It is one of only two states that doesn't use the winner-take-all system in presidential elections. Along with Maine, it allocates its Electoral College votes to reflect the results in each of its congressional districts.

Keep reading...Show less
{{ post.roar_specific_data.api_data.analytics }}