Posted on 10/30/2013 11:37:27 AM PDT by NormsRevenge
WASHINGTON (Reuters) - The Federal Reserve extended its support for a slowing U.S. economy on Wednesday, sounding a bit less optimistic about growth and saying it will keep buying $85 billion in bonds per month for the time being.
In announcing the widely expected decision, Fed officials nodded to weaker economic prospects due in part to a fiscal fight in Washington that shuttered much of the government for 16 days earlier this month.
The Fed indicated the recovery in housing had lost some steam, while noting some reversal in a recent spike in borrowing costs.
"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months," the Fed's policy-setting Federal Open Market Committee said. "Fiscal policy is restraining economic growth."
The labor market has shown "some" further improvement, the Fed said, tempering its description after a recent weakening in the jobs figures. It dropped a reference to a "tightening of financial conditions observed in recent months" from its list of risks to the outlook, but many economists stuck with bets for stimulus to stay into next year.
"Until the economic data strengthens, and strengthens meaningfully, I think expectations for tapering are going to remain subdued," said Rishna Memani, chief investment officer at Oppenheimer Funds in New York. "The likelihood of anything happening in December is modest."
Esther George, president of the Kansas City Federal Reserve Bank, dissented against the decision as she has at every FOMC meeting this year, favoring a modest reduction in the pace of bond purchases.
(Excerpt) Read more at finance.yahoo.com ...
I think they are trying to maintain the illusion of competence.
I have no idea what the answer to that might be.
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