The
Federal Open Market Committee voted to leave the Fed Funds Rate
within its target range of 0.000-0.250 percent.
It also reiterated plans to support the mortgage market to the
tune of $1.5 trillion.
In its press release, the FOMC noted that the U.S.
economy is "leveling off" and that financial markets continue to
improve.
The change in verbiage is the rosiest from the Fed since the
start of the recession and it may signal that the downturn's end
is near.
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.
