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Fed Policymakers Expected To Stay the Course Today
WASHINGTON (10/30/13)--When the Federal Open Market Committee completes its two-day meeting today on Federal Reserve monetary policymaking,  its statement may not include any increases in target federal fund market rates or a tapering of the Fed's quantitative easing (QE3) policy, according to several surveys of economists.
 
The FOMC's statement at the end of the meeting is expected at 2 p.m. ET.  Many had expected an announcement last month about the beginning of the Fed's tapering of its $85 billion a month purchases of government bonds and mortgage securities, but the committee opted for no change after economic recovery began to slow. The committee was split as to when to start tapering off QE3. Originally the Fed had indicated last summer the bond buying program would begin its reduction by the end of 2013.
 
However, the government shutdown and debt ceiling debate's impact on the economy have shifted expectations for withdrawing the stimulus program to next year, according to Associated Press (via The New York Times Oct. 29) and Business Insider (Oct. 27).
 
According to economists surveyed by Business Insider, the Fed is expected to keep the benchmark interest rate at 0% to 0.25% and to hold off on announcing any reduction in the bond asset purchase program.  That publication said that although today's meeting is a "non-event," people will watch for any changes to the Fed's official statement and whether the committee continues to see downside risks to the economic outlook and a diminished labor market.
 
A Bloomberg survey noted that the budget impasse would spur the Fed's policymaking group to wait until March to scale back the bond purchases (Bloomberg.com Oct. 28).
 
Watch today's News Now and News Now LiveWire for updates on the meeting.


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