Thursday, January 27, 2011

The Federal Reserve remains on course

The U.S. central bank still considers that the economic recovery is too low to provide a significant decline in unemployment. It will therefore pursue its policy of quantitative easing.
The Federal Reserve remains on course. After his first Monetary Policy Committee (FOMC) of the year, the statement confirmed the continuation of its quantitative easing program (QE2) to purchase for $ 600 billion of treasury bills by in late June. It also kept its key rate in the range of 0 to 0.25%, its lowest level ever.
The Fed, which also mandated the support job, essentially held that the economic recovery that engages the United States was still not strong enough to improve the situation on the labor market. It seems slightly less pessimistic than at its last meeting. Meanwhile, the unemployment rate fell sharply during the month of December.
The U.S. central bank said the long-term expectations for inflation remained stable, despite rising commodity prices. This trend worries, however, other central banks, as the European Central Bank (ECB). In emerging markets, particularly China, the acceleration in inflation is also closely monitored.
For the first time since 2009, this decision was taken unanimously when Thomas Hoenig, president of the Kansas City Fed, voted consistently against the decisions of the FOMC. It's no longer part of the voting members of the Committee, which is partially renewed each year.

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