Oct. 24, 2012 – NAFCU Chief Economist David Carrier said he does not expect big news at the conclusion of today’s two-day Federal Open Market Committee meeting on monetary policy.
The committee just last month announced it is pursuing a third round of quantitative easing. At the conclusion of its Sept. 12-13 meeting, the FOMC said QE3 would involve a new round of large-scale asset purchases by the Fed. The committee also announced that it would continue its average maturity extension program, continue reinvesting its current holdings and purchase additional agency mortgage-backed securities at a pace of $40 billion a month.
The FOMC also voted in September to keep the federal funds rate target range at 0 to 0.25 percent and said it expects exceptionally low levels for that rate will likely be warranted at least through mid-2015.
The September meeting, however, “left the policy goal open-ended,” Carrier said. The FOMC “did not announce a specific target for the unemployment rate or specific goals or duration for this round of easing.” Carrier added that there is “no telling whether or not they believe a target unemployment rate is warranted. If they do, it’s another step the committee could take.”
In related news, a recent report in The New York Times indicated that Federal Reserve Chairman Ben Bernanke will probably will not serve a third term at the central bank, even if President Obama is reelected.
Republican presidential nominee Mitt Romney has already said he would not re-nominate Bernanke if he wins the presidency. Bernanke's term as chairman ends in January 2014.
Bernanke chairs the FOMC.