The Federal Reserve, the central bank of the United States, trimmed its asset purchases by another $10 billion to $45 billion in May, as widely expected, and reiterated that it still expects to maintain the current target range for the benchmark federal funds rate "for a considerable time after the asset purchase program ends," especially if inflation is below the 2.0 percent target.
The Fed, which has kept the fed funds rate at its current level of 0.0-0.25 percent since December 2008, also said economic activity had picked up recently after slowing during the winter, partly due to adverse weather, and pointed out that "household spending appears to be rising more quickly," a more upbeat assessment than in March when it said household spending had advanced.
However, this more upbeat assessment was balanced by the comment that business fixed investment had edged down. In March the Fed said investment had advanced.
The Fed started winding down its asset purchases of Treasury bonds and housing-related debt in January and has now cut its monthly purchases in half from $85 billion.
The Fed is maintaining its policy of reinvesting payments from its bond holdings and expects its sizable, and still rising holdings, to maintain downward pressure on longer-term interest rates, supporting the economic recovery and helping ensure that inflation eventually rises to the Fed's goal.
(more to come)
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The Fed, which has kept the fed funds rate at its current level of 0.0-0.25 percent since December 2008, also said economic activity had picked up recently after slowing during the winter, partly due to adverse weather, and pointed out that "household spending appears to be rising more quickly," a more upbeat assessment than in March when it said household spending had advanced.
However, this more upbeat assessment was balanced by the comment that business fixed investment had edged down. In March the Fed said investment had advanced.
The Fed started winding down its asset purchases of Treasury bonds and housing-related debt in January and has now cut its monthly purchases in half from $85 billion.
The Fed is maintaining its policy of reinvesting payments from its bond holdings and expects its sizable, and still rising holdings, to maintain downward pressure on longer-term interest rates, supporting the economic recovery and helping ensure that inflation eventually rises to the Fed's goal.
(more to come)
Go to Original Story
by InformedTrades via InformedTrades
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