The final Federal Reserve Open Market Committee meeting of the year just ended, and the nation’s central bankers took no action. The key interest rate – known as the Fed Funds rate – remains at 0 to 0.25 percent as does the Fed’s promise to keep rates at his historically low level through mid-2013.
The post-meeting statement suggests the Fed sees “…the economy has been expanding moderately, notwithstanding some apparent slowing in global growth.”
Other key points in their assessment of the economy:
- There are indicators that the jobs situation is getting better, but unemployment remains too high.
- American consumers are consistently increasing their spending.
- Businesses are not increasing their spending as quickly.
- Housing market continues to be a trouble spot.
- Prices are increasing at a moderate pace, and long-term inflation expectations are in-check.
They did note that there are “significant downside risks” and most on Wall Street suggest this is a less-than-subtle hint at the risks posed by Europe’s current debt woes.
Markets were expecting the Fed might announce a new program that would lower an interest rate at the Discount Window – currently around 0.75 percent. The lack of action on that front pushed stocks into negative territory for the day.