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Banking, finance, and taxes

FOMC Maintains Low Rates To Late 2014 Stance

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By Jon C. Ogg Updated Published
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As expected, Ben Bernanke and the FOMC left interest rates unchanged yet again.  With a recent in-line unemployment and payrolls report and with Mr. Bernanke having already testified before Congress, we just were not expecting much today.  The vote was 9 to 1 in favor of the rate decision and the discount rate is unchanged at 0.75%.

Investors will want to know that the FOMC calls the unemployment still as elevated despite the improvements.  The FOMC expects economic growth to moderate in the coming quarters and longer-term inflation expectations remain stable with inflation remaining at or under the target level although inflation right now is deemed as temporary with higher oil and gas prices.

MOST IMPORTANT: Fed Funds are still expected to remain exceptionally low at least to late 2014. 

The FOMC will maintain its plan to reinvest mortgage debt principal payments.

Lacker was the dissenting vote and his dissent is regarding the communication of the timing out to late in 2014.

FULL FOMC COMMENTS

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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