The Federal Reserve on Wednesday ended its monthly bond purchase
program and dropped a characterization of U.S. labor market slack as
“significant” in a show of confidence in the economy’s prospects.
In a
statement after a two-day meeting, the central bank largely dismissed
recent financial market volatility, dimming growth in Europe and a weak
inflation outlook as unlikely to undercut progress toward its
unemployment and inflation goals.
“On balance, a range of labor market indicators suggests that
underutilization of labor resources is gradually diminishing,” the Fed’s
policy panel said in an important departure from prior statements,
which had described the slack as “significant.” “The committee
continues to see sufficient underlying strength in the broader economy,”
it said.
U.S. stocks added to earlier losses after the statement but came back
to close down only marginally, while the yield on the 5-year U.S.
Treasury note jumped, putting it on track for its biggest one-day
increase since mid-March. The yield on the benchmark 10-year U.S.
Treasury note was little changed. The dollar rose to a three-week high
against a broad basket of currencies as traders pulled forward
expectations of when the Fed would eventually raise interest rates.
2014/10/30
Fed Shows Confidence in U.S. Recovery
Fed Shows Confidence in U.S. Recovery
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