The Fed’s Open Market Committee or FOMC, which is the Federal Reserve’s rate-setting committee, issued a statement today. It said that the Fed is maintaining its current stimulus programs, which are Operation Twist and QE3. It pledged to keep the interest rates low until mid-2015.
But even with the statement made by the FOMC, stocks were not affected. The Dow was up around 16 points before the statement was released. It dropped around 12 points then recovered right away. That was the least reaction to a statement made by Fed in recent times.
Gold went up $7 right after the Fed statement hit the Broadtape. But it went down to $1,700 per ounce with the gain quickly dissipated. The market didn’t expect a lot from the FOMC meeting. The Fed implemented its QE3 last September and the presidential election nears.
The market has been obsessed with Fed policies and their announcements. But the market showed no interest at all for the FOMC statement released today. The committee reported that it concluded its two day meeting and it didn’t give a press conference. But the market didn’t expect one to happen and continued with business as usual. They expected no surprises and nothing new from the meetings.
Analysts expected the FOMC to comment on the unemployment rate. It should be noted that the stimulus actions have begun to take effect. The unemployment dropped last month from 8.1 percent to 7.8 percent, which was the lowest level since January 2009.
A lot questioned the September jobs report and described it as suspicious and called it a ploy to make President Barack Obama look good as the election nears. But the outlook for the job market remained unchanged and still weak.
Analysts expected to hear that the interest rates will near zero until 2015. The Fed maintained it can keep the interest rates low and avoid inflation but didn’t elaborate on how they plan to do so.