A Simple Explanation Of The Federal Reserve Statement (August 12, 2009 Edition)
It also reiterated plans to support the mortgage market to the tune of $1.5 trillion.
That said, the Fed highlighted lingering economic soft spots that could still impact a recovery through the end of 2009 and into 2010.
- Ongoing job losses
- Reduced “housing wealth”
- Tight credit conditions
Furthermore, rising energy costs remain a threat to inflation.
Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to honor its $1.25 trillion commitment to the mortgage bond market.
Market reaction to the Fed’s press release is muted. With no real change in message and a basic confirmation of what most investors already knew, Wall Street sees no reason to panic. Mortgage rates are unchanged.
The FOMC’s next scheduled meeting is September 22-23, 2009.