Fed Decision Even More Dovish Than It Seems: Jersey

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Sept. 18 (Bloomberg) -- The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs to see more signs of lasting improvement in the economy. Bloomberg's Mike McKee and Credit Suisse's Ira Jersey comment on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Most people did not expect it.

The economic data had come in weaker than expected.

The fed said they would be data dependent.

The biggest change, in the mortgage area, take knowledge mortgage rates had gone up and that may be starting to restrain the housing market and that may be the key.

They do not want the housing market to take a hit.

Beyond that, most of the economic assessment is almost word for word.

The economy is slowly getting better, we are seeing the unemployment rate come down.

The labor market situation is improving, but it has a lot to be desired.

They see inflation, for the most part, as lower than they want, but ready to come back up again.

When you look at their forecast for the next couple of years, they lowered their gdp forecast in 2014 and raised in 2015. a lower their unemployment rate for both of those years and lowered their inflation rate for the next year.

2016, the unemployment rate falling between 5.2 and 5.8%. that is probably because there were two fewer people voting -- too fewer people voting.

This is so exciting, never a dull moment.

Michael mckee will dive into the forecast and give us his perspective.

This is the money page within the survey.

There are lots of dots.

What do you gleam from these forecasts?

This is even more dovish.

The path of interest rates is much lower than even our pretty pessimistic forecast.

They have in their gdp forecast, they have gdp at or above the long-term numbers.

They will see less than two percent, less than two percent fed funds rate in 2016. the market is taking this as a celebration, more qe, no more tapering.

Should we be worried about the fact that some members of the federal reserve are worried about this economy?

Taxpayer trying to be ultra- cautious.

-- they are trying to be ultra-cautious.

This is very dovish.

They are concerned about the move in interest rates.

Some of the housing data has not been very strong.

Michael mckee, what do you see?

In 2015, the majority thinks that is when they will start tapering and they see that by 2015, you will have a median rate of one percent for federal funds.

By 2016, 2%. this is a go slow and go low, it even though they are backing off.

A message to the markets not to let that short-term rate.

It is the stock of treasuries that they will own at the end.

We will have a balance sheet of about 4 trillion.

It is how much weakened up with.

There is a lot to chew on in this report.

Peter cook is standing outside

This text has been automatically generated. It may not be 100% accurate.


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