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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
From the Release: "Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. 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, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
Pre-Release Analaysis: This week’s key fundamental release will be Tuesday’s FOMC interest rate meeting. The Federal Reserve is unlikely to offer any hints about raising interest rates and a renewed commitment to ultra-low rates could put the Dollar on the defensive. The possibility that the Fed would raise rates sooner had been a source of support for the greenback but until there is some positive job growth and inflation readings begin to heat up it is unlikely, with other uncertainties in the global market, that the Fed will send signals of tighter monetary policy ahead. However, there may be some further moves to normalize monetary policy as we had seen by the increase in the discount rate. The signal that traders are now looking for is an increase in the rate that the Fed pays for banks to hold their reserves with the Fed and would be one of the first firm moves that higher interest rates are on the way.What is most likely is that the Fed will gently remind the markets that we’re they are in the process of rescinding the emergency measures that were implemented during the height of the crisis, but that low rates are here for the time being. Until we see some shifting of expectations that rates will remain ultra-low for an “extended period” the Dollar will be negatively correlated with positive fundmantal data as traders will seek out higher yielding and growth-linked currencies such as the Australian and Canadian Dollars.
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| 1/28 | 3/18 | 4/29 | 6/24 | 8/12 | 9/23 | 11/4 | 12/16 | 1/27 | 3/16 | ||
| Actual | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | 0.25% | <0.25% | <0.25% | |
| Forecast | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | 0.25% | <0.25% | <0.25% | |
| Previous | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | <0.25% | 0.25% | <0.25% | <0.25% | |
| Revised From | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
From the Release: "Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. Firms have brought inventory stocks into better alignment with sales. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of 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, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period." |
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Actual | Forecast | Previous | Revised Form | |
| 0.25% | 0.25% | 0.25% | N/A | ||
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Provided by: Federal Reserve
The Federal Reserve repeated its pledge to keep interest rates "exceptionally low" for "an extended period." The statement restated that low interest rates are contingent on "low rates of resouce utilization, subdued inflation trends, and stable inflation expectations." Economic activity, which the Fed sees as "picking up" is still facing the problem of very high unemployment and while "the deterioration in labor market is abating" the Fed is likely waiting for signs of actual and sustained job growth before committing to raising rates. Also, it seems that the Fed is watching inflation expectations closely. In November consumer and producer prices both picked up, but mainly on higher energy costs, so this week's inflation reports are probably unlikely to chang the FOMC member's minds. The statement says officials believe "inflation will remain sundued for some time." The Fed said that it would continue its purchasts of agency mortgage-backed securities totatlin$1.25 trillion and about $175 billion of agency debt through the first quarter of 2010, something they had commited to in previous statements. "Most of the Federal Reserve's special liquidity facilities will expire on Feb. 1st 2010."
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
Today's Fed announcement held little in the way of surprises thought they did lower the amount of housing agency debt they would buy from $200 billion to $175 billion. The statement kept the same language about keeping rates at the current low levels for an "extended period" meaning that the Fed was not ready to push up its plan to raise rates. The statement showed that the Fed does not consider inflation a threat and is most likely sees inflation risks on the downside. In the outlook on the economy, the Fed sees the housing sector improving, but household spending though expanding, remains "constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit." Overall, the statement was a slightly dovish on, and the Euro moved above the 1.4850 level in its wake. |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
From the Release: "With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time... 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." |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
In their statement the Fed reiterated their policy to keep interest rates exceptionally low “for an extended period of time”, though it did paint a more optimistic outlook in which economic activity is leveling out, with financial markets having improved. Still, the Fed was cautions about the fragility of that improvement, and with inflation expected to stay low, they gave no indication of an exit strategy to their zero-interest rate policy. They did announce that they will wind down the $300 billion program to buy long-term Treasuries. |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
From the Release: "Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of 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. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn." |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
The Federal Open Market Committee concluded its 2-day meeting and gave a more or less unchanged outlook on the economy. While acknowledging minor improvements in the economy, more contraction is expected. There was a unanimous vote to keep the rates unchanged. The Fed expressed a wait-and-see approach to quantitative easing, something the market is expecting to hear more of since interest rates are already near zero. |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
Today's FOMC announcement surprised markets as the Fed said that it would expand its purchases of mortgage-backed securities by $750 billion and has decided to purchase $300 billion of long-term US Treasuries over the next six months. The news boosted equities as it implies the Fed is trying to lower rates on the many corporate, mortgage and consumer loans linked to benchmark government debt. The greenback suffered as the expansion of these Fed programs will add extra debt to the Fed's balance sheet, which debases the value of the greenback.
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
Discount Rate: pr. 0.50% (Dec 16th), 1.25% (Oct 29), 1.75% (Oct 8) The FOMC statement held little in the way of surprises though it did say that the Fed was prepared to purchase longer-term Treasury securities. US equities which were already up on teh day moved even higher helping to boost the USD/JPY pair and gave the Dollar strength against the Euro.
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