U.S. Federal Reserve Board issued a statement on the 20th that will maintain a highly accommodative monetary policy, maintaining the federal funds rate in the range of zero to 0.25 percent at least until the second half of 2014. In recent months, the slowdown in employment growth, unemployment remains high, the Fed has not any hint will introduce further quantitative easing (QE3), but distort the operation will be extended to the end of the year, the amount of $ 267 billion.
U.S. Federal Open Market Committee meeting decided that the so-called "distort the operation was extended to the end of the year, the program was launched in September last year to buy $ 400 billion in U.S. Treasury bonds before the end of June 2012, the remaining maturity of between 6 to 30 years; sell the same amount of U.S. Treasury bonds, the remaining maturity of 3 years or less. The U.S. Federal Open Market Committee also said that the Fed still expected before the end of 2014, the benchmark interest rate at very low levels.
Disappointing due to the recent economic data. At present, economists forecast the second quarter growth rate of 2% in the fourth quarter of economic growth below 2%. In a statement, the Fed said that economic growth is too slow, the unemployment rate is high. The slowdown in consumer spending. The Fed is expected to rebound in economic growth was "very slow", the unemployment rate will decline slowly.
Harvard economics professor Martin Feldstein, Feldstein said recently that the Fed's actions to reverse the bond and stock markets, but little impact on economic activity.
Distort the operation plan was first announced in late September last year, 10-year bond yields dropped to 1.65 percent from 2 percent, residential mortgage rates have declined from 4.09% to 3.71%. But other factors, especially the debt crisis in Europe, and industry to reduce U.S. bond yields. Analysts say, in the same eight months, Jones industrial average was up 15.4%.
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