The Federal Open Market Committee voted to leave the Fed
Funds Rate
unchanged today within its target range of 0.000-0.250
percent.
The
Fed also reiterated its plan to support the mortgage market to the tune
of $1.5 trillion.
In its press release,
the FOMC noted that the U.S. economy is not slowing with the same speed
versus just two months ago and that financial markets, in general, are
improving.
These are two signs
that the country may be emerging from recession, if it hasn’t
already.
The news isn’t all good,
however. The Fed made a point to highlight the potential
hazards the nations faces on its path to economic
recovery:
- The prices of energy
and commodities have been rising - Job
losses are still mounting
nationally - Businesses are reducing
capital expenditures
Also in its statement, the Fed acknowledged a plan to
hold the
Fed Funds Rate near zero percent “for an extended period” and a
re-commitment to the U.S. Treasury and Mortgage Bond
markets.
Market reaction to the Fed’s press release has been
muted.
With no new stimulus and
no new “tools” to spur the economy unveiled, Wall Street is business as
usual. Mortgage rates are unchanged post-FOMC
today.
The FOMC’s next scheduled meeting is August 11-12,
2009.
