Fed ends QE, sees ‘underlying strength’ in economy
Washington (Oct 29) The U.S. Federal Reserve Board has wrapped up its two-year-old asset-buying stimulus program known as “QE3,” signalling a turning point for the U.S. to begin tightening its monetary conditions for the first time in eight years.
In the statement accompanying its regularly scheduled monetary policy decision, the bank’s policy-setting Federal Open Market Committee said there “has been a substantial improvement in the outlook for the labour market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability.”
The Fed did not adjust its so-called “forward guidance” statement on the timing of interest rate increases, though, continuing to say that “it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program … especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.”