Fed Keeps $85B QE Pace, Awaits Economy Picking Up

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Oct. 30 (Bloomberg) -- The Federal Reserve decided to press on with $85 billion in monthly bond purchases, saying it needs to see more evidence that the economy will continue to improve. Peter Cook reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Buying program, continuing at the $85 billion per month pace.

Again, that stays the same.

Much of the statement remains the same as well.

Basically this is almost a replay it and -- from september.

Let me read you a key section of the statement that we saw in december.

The committee saw the improvement in economic activity with labor market conditions that began during the purchase program.

Consistent with the logmein strength of the broader economy.

They are waiting more evidence that progress will be sustained before adjusting the pace of purchases.

Let me talk through a bit of the changes in the economic language and economic activity here.

Continuing at a modest pace, indicators show further improvement that the unemployment rate remains elevated and available data suggest that household spending is advanced in the housing recovery sector over the recent months and fiscal policy is restraining growth due to changes in energy prices and inflation has been running below their long-run objective for expectations that have remained stable.

Like you were referring to, tightening financial conditions in the statement, the forward guidance remains the same with regards to what will happen to interest rates over time, again repeating what the fed has said in the past.

They decided to keep the target rate zero to .25% and they are looking at an exceptionally low range that will appropriate for at least as long as unemployment remains below 6.5% of no more than half of one percent above the committee long-run goal with longer-term inflation expectations continuing to be well anchored.

Finally, the vote was not unanimous.

Esther george remains again concerned.

"increasing the risk of financial balances over time could cause an increase in long- term inflation expectations." basically a replay from the september session of the fed, no change in the bond buying program, no indication of when tapering could occur.

Sending it back to you, having a

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


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