Minutes of the
held on September 17-18, 2013, revealed some more details about
the Fed's surprise decision to keep its asset purchase program
Committee members agreed that
the economy was expanding at a moderate pace but despite some
improvement in labor market conditions, the employment rate
They also observed that
consumer and business spending had increased and the housing
sector was strengthening; but mortgage rates had risen further
and fiscal policy was also restraining growth.
After taking into account the improvement in the economy and
labor market conditions and the impact of fiscal retrenchment,
all members except one
decided to wait for more evidence of progress before making any
change in the asset purchase program.
The decision to not taper was a
relatively close call
for several members and some were even concerned about the
effectiveness of FOMC communications as financial markets were
expecting a 'tapering'.
Most participants were hopeful that the Fed could begin tapering
this year and complete the program in mid-2014.
The more important Fed related news today is that Janet Yellen
would be nominated as the central bank's next chairperson.
The market expects a more accommodative Fed under her leadership.
Do think that her nomination means no tapering this
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