US Fed to stick to stimulus until jobs pick up
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.
Wednesday 24 October 2012
America's central bankers yesterday reiterated their promise to support the still-weak US economy until it started generating enough jobs, acknowledging bright spots in areas such as housing, but warning that joblessness remained "elevated".
At the end of a two-day policy meeting, the Federal Reserve said it would continue buying up $40bn (£25bn) worth of mortgage-backed securities each month in its attempt to drive down interest rates. While holding interest rates close to zero since the dark days of the financial crisis in 2008, the Fed had already spent $2.3 trillion on mortgage-related and government-issued debt before embarking on a fresh effort to stimulate the economy.
The Fed said it remained concerned that "without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labour market conditions."
While acknowledging that the housing sector was improving, the Fed went on to say "a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens".
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