Fed, Citing A Still-Struggling Economy, Will Keep Buying Bonds
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
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The Federal Reserve says the economy is growing but not fast enough. The Fed concluded its latest two-day meeting this afternoon. In a statement, the central bank said it will keep buying bonds at the rate of $85 billion a month, to stimulate the economy. NPR's Jim Zarroli is here to explain what all this means. And, Jim, to start, the Fed statement have anything new to say about the direction of the economy?
JIM ZARROLI, BYLINE: Not much. Not really. As these statements go, it was kind of more of the same. It did say the recovery in the housing market has slowed, and that's new. In the past - its recent past, it said that the housing market was getting stronger. But overall, you know, the Fed's view of the economy is about what it's been for a while which is, you know, was kind of middling.
I mean, the labor market is improving, but unemployment is still too high. Inflation is still low. Household spending and business investment is up. So, you know, things are getting better. They're just not getting better fast enough.
CORNISH: One major event since the last Fed meeting with the government shutdown, did the statement referred to that in any way?
ZARROLI: No, not directly. Yeah, a lot of economists have said, you know, the government shutdown probably shaved a fraction of a point off the growth rate during October. You know, the Fed statement didn't say anything like that - didn't go that far. What it did say was the fiscal policy has restrained economic growth.
In other words, you know, all this uncertainty about the budget, about government spending has been bad for the economy, which is something that the Fed Chairman Ben Bernanke has said before. And in the eyes of the Fed, that's one of the reasons why they're having such trouble kind of getting a full picture of the economy right now. I mean, the picture just remains too murky.
CORNISH: And there's been a lot of speculation this year about when the Federal Reserve might decide to ease up on some of the measures it's taken to stimulate growth. Now, did the statement today cast any new light on when that might happen?
ZARROLI: No, the statement didn't. I mean, it doesn't look like it's going to happen anytime soon. There was a lot of fear in the financial markets, especially over the summer that the Fed was going to slow up on its bond buying, which is aimed at keeping interest rates low and, you know, doing good things for the economy. And that really sent the stock market down for while. But that, you know, the tapering of the bond buying purchases, that really seems to be off the table now.
What the Fed is saying is, you know, we're going to look at the data. We're going to decide as time goes on. I mean, the government shutdown really added this element of uncertainty to the forecasting that the Fed did. And even if they decide to slow up on the bond buying, they say they're still going to keep interest rates low for what they call a considerable time. So I think the message is, you know, stay tuned.
CORNISH: That's NPR's Jim Zarroli in New York. Jim, thank you.
ZARROLI: You're welcome.
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