FOMC Reports Economic Activity Has Picked Up

The FOMC statement did have an effect on the market this afternoon. A short time after issuing their statement, the S&P 500 was up 0.6 per cent and the yield on the 10-year Treasury was 3 basis points lower at 3.40 per cent.

"Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased ... Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability."

Votes on the monetary policy action at the FOMC meeting were unanimous and the statement was seemingly designed to avoid disruption of the financial markets. The FOMC wanted this statement to be low key and so far that has been successful.

..."the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

Read the entire FOMC press release here.

Written by: Cheryl Phillips
Providence, RI
Exclusive to HULIQ.com