A Look At The Federal Reserve's FOMC Meeting - March 13, 2012
The U.S. Federal Reserve has within the past hour concluded its latest Federal Open Market Committee (FOMC) meeting, with a basically upbeat view of the domestic economy, which is a refreshing change from where it saw things several meetings ago, when the outlook seemed less hopeful.
Overall, the latest Fed release indicates that the FOMC sees the economy expanding moderately in the months to come. Specifically, it opines that labor market conditions have improved further; that the unemployment rate has fallen notably, but remains elevated; and that household spending and business fixed investment have continued to press higher. On the other hand, it also suggested that the housing market remains depressed, and that notwithstanding higher crude oil and gasoline prices of late that inflation remains largely subdued, with the long-term pricing expectations continuing to be relatively stable--as the lead bank would want.
The Fed, as it always does, indicated that its mandate is to seek a balance between maximum employment and price stability; the latter, it would seem, is now more easily achievable than the former. In all, the Committee reaffirmed that it expected to see moderate economic growth over the coming quarters and anticipates that the jobless rate will, as a result, gradually decline further. At the same time, strains in the global financial markets have eased, but that the recent uptick in oil and gasoline prices could pose some pricing problems in the short run.
The Fed also maintained once again that it expects to keep the target range for the federal funds rate at between zero percent and just one-quarter of a percent through at least late 2014. At the same time, there were no new initiatives introduced by the FOMC to further invigorate the economy, which seems to be pushing forward without that extra aid quite nicely now. The lead bank, though, did hold out the possibility that it could shift course should the situation warrant. The vote on this stable policy was near unanimous, with just one dissenter, Fed Governor Jeffrey M. Lacker, noting that he “does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.”
Overall, it was a reassuring statement and one that would seem to be consistent with the somewhat better economic trends now in place across this country.
At the time of this report's posting, the author did not hold positions in any of the companies mentioned.