This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-24152993
The article has changed 8 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| The US Federal Reserve decides not to taper stimulus | The US Federal Reserve decides not to taper stimulus |
| (35 minutes later) | |
| The US Federal Reserve has decided to maintain its economic stimulus programme at the current level, despite speculation that it would start scaling it back. | |
| US shares jumped after the announcement with the Dow Jones & S&P 500 indexes hitting record highs. | |
| It had been widely expected that the central bank would cut back - or taper - its $85bn a month bond purchase plan. | |
| The Federal Reserve has been buying bonds to keep interest rates low. | |
| In a statement, the Fed said the unemployment rate "remains elevated". | In a statement, the Fed said the unemployment rate "remains elevated". |
| "The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases," it said. | "The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases," it said. |
| The Fed also highlighted that mortgage rates have risen recently. | The Fed also highlighted that mortgage rates have risen recently. |
| Uncertainty over the strength of the economic recovery was underlined by the Fed's latest economic growth forecasts. | Uncertainty over the strength of the economic recovery was underlined by the Fed's latest economic growth forecasts. |
| It cut its forecast for growth this year to between 2.0% and 2.3%. That compares to a June estimate of between 2.3% and 2.6%. | It cut its forecast for growth this year to between 2.0% and 2.3%. That compares to a June estimate of between 2.3% and 2.6%. |
| 'No fixed schedule' | 'No fixed schedule' |
| In a press conference following the release of the statement, chairman Ben Bernanke highlighted three reasons why the Fed had decided to hold off scaling back its bond purchasing. | In a press conference following the release of the statement, chairman Ben Bernanke highlighted three reasons why the Fed had decided to hold off scaling back its bond purchasing. |
| Those were: the low labour force participation rate, drags on economic growth due to congressional wrangling over a looming budget deadline, and "the tightening of financial conditions observed in recent months". | Those were: the low labour force participation rate, drags on economic growth due to congressional wrangling over a looming budget deadline, and "the tightening of financial conditions observed in recent months". |
| He said "asset purchases are not on a preset course" and that the central bank would continue to prop up the US economy for as long as it felt extra stimulus was needed. | He said "asset purchases are not on a preset course" and that the central bank would continue to prop up the US economy for as long as it felt extra stimulus was needed. |
| "There is no fixed calendar, schedule. I really have to emphasise that," said Mr Bernanke. | "There is no fixed calendar, schedule. I really have to emphasise that," said Mr Bernanke. |
| He also defended his decision to begin hinting to markets that the central bank was considering a slowdown in its stimulus efforts in June, leading to a build up in speculation over the summer. | He also defended his decision to begin hinting to markets that the central bank was considering a slowdown in its stimulus efforts in June, leading to a build up in speculation over the summer. |
| "I think there's no alternative in making monetary policy but to communicate as clearly as possible," he said. | "I think there's no alternative in making monetary policy but to communicate as clearly as possible," he said. |
| In addition, he appeared to row back from comments indicating that if the US unemployment rate dropped below 7%, the Fed would consider that the US economy was on track. | In addition, he appeared to row back from comments indicating that if the US unemployment rate dropped below 7%, the Fed would consider that the US economy was on track. |
| He refused to take questions on what he planned to do once his second term ends in January 2014. | He refused to take questions on what he planned to do once his second term ends in January 2014. |
| "If you will indulge me just a little longer, I prefer not to talk about my plans at this point," he said. | "If you will indulge me just a little longer, I prefer not to talk about my plans at this point," he said. |
| Not there yet | Not there yet |
| The news of the delay in cutting back on the economic stimulus took many by surprise. | The news of the delay in cutting back on the economic stimulus took many by surprise. |
| The dollar fell, and gold prices rose on the news. | The dollar fell, and gold prices rose on the news. |
| Mortgage rates, which had risen dramatically over the summer, fell, perhaps easing concerns that higher rates were hurting a nascent housing recovery. | Mortgage rates, which had risen dramatically over the summer, fell, perhaps easing concerns that higher rates were hurting a nascent housing recovery. |
| Markets cheered the extension of cheap money, rising to record highs, with all US indices up on the news. | Markets cheered the extension of cheap money, rising to record highs, with all US indices up on the news. |
| "The Fed is in no rush to taper or slow the economy," said Ward McCarthy, chief US economist at Jefferies. | "The Fed is in no rush to taper or slow the economy," said Ward McCarthy, chief US economist at Jefferies. |
| "The bottom line is that the economy continues to move toward a condition that will eventually allow the Fed to gradually reduce the size of [bond] purchases. | "The bottom line is that the economy continues to move toward a condition that will eventually allow the Fed to gradually reduce the size of [bond] purchases. |
| However, the economy has not yet reached that point." | However, the economy has not yet reached that point." |