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The Federal Reserve has completed its latest Federal Open Market Committee (FOMC) and opted to stay the course on its current loose monetary policy, as expected.

Specifically, the lead bank intoned that "economic activity expanded at a modest pace during the first half of the year." The Fed went on to comment about labor conditions, which it affirmed had improved in recent months, but that “the unemployment rate remains elevated.”

The central bank also acknowledged that household spending and business fixed investment were still advancing, but that mortgage rates have risen, which could, the implication would seem to be, eventually hurt the fast-recovering housing market.

The Committee, consistent with its dual mandate ''seeks to foster maximum employment and price stability.'' Clearly, with a jobless rate of 7.6% (new figures are due out Friday morning on this key metric), there is plenty of work to be done with regard to one of these mandates. As to pricing, the lead bank also acknowledged that '' the Committee recognizes that inflation persistently below its 2% objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.'' The implication here is that the Fed will watch closely for signs of disinflation, or even more worrisome, the unlikely onset of deflation.

Also, to support lowering the jobless rate, generating stronger economic growth, and ensuring that inflation adheres most closely to the rate expressed in the dual mandate (i.e., 2%), the Fed will, for now, continue to purchase agency mortgage-backed securities and longer-dated Treasury issues. Our thinking is that the bank will gradually cut back on such buying, but not until later this year.

To this end, the central bank noted that it will closely monitor incoming information on economic and financial developments, with the objective likely being to secure some guidance on the economy before acting.

Taken as a whole, there was little new in this statement, and the markets should find few excuses here to notably shift gears either toward more buying of financial assets, or the initiation of a resumption of the mid-June profit taking in the stock market.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.