Fed to keep pumping cash into US economy
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Thursday 21 March 2013
Investors were reassured after America's central bank signalled yesterday that it would continue to support the world's largest economy by buying billions of dollars worth of bonds every month.
The Federal Reserve made no chances to its loose monetary stance for its latest policy meeting, which concluded on Wednesday. Although it slightly lowered its growth forecasts for 2013 and 2014, the focus was on whether the Fed would tweak its programme of buying $85bn (£56bn) in mortgage and government bonds to support the economy every month.
The Fed's forecasts for unemployment were more optimistic, though still well above the 6.5 per cent level that the bank views as critical before it begins raising interest rates.
At a press conference following the meeting, the bank's chairman, Ben Bernanke, said that while there were risks to keeping the stimulus in place, including the possibility that some investors might use the easy regime as an excuse to take on too much risk, such challenges were "manageable".
Mr Bernanke also weighed in on the recent flare-up in the European sovereign debt crisis, with the world looking on nervously at the events unfolding in Cyprus.
"It's a difficult situation in Cyprus," he said, noting that while the country's GDP was relatively small, its financial sector was much larger, making Cyprus's travails a much bigger problem that might be apparent at first glance.
"But having said that, the vote [by the country's MPs over a proposed tax on savings in banks as condition of a European bailout] failed and the markets are up today and I don't think the impact has been enormous," he added.
He said he expected the euro area countries and Cyprus to come to an agreement to ease the pressures in the country. "We hope the Europeans will up with an efficient and equitable solution."
- 1 A daily walk 'can add seven years to your life'
- 2 Rules on 5p plastic bags likely to lead to arguments at the check-out
- 3 Chrissie Hynde says women who 'wear high heels and dress provocatively entice rapists'
- 4 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
- 5 News agency criticised for describing Amal Clooney as 'actor's wife' in coverage of human rights trial
University to mark down students who say 'illegal immigrants' in class
Rules on 5p plastic bags likely to lead to arguments at the check-out
The nine most warmongering countries in the world revealed
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
VMAs 2015: Taylor Swift wins big, Kanye West runs for president, Nicki Minaj calls out Miley Cyrus and the rest of tonight's winners
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...