U.S. ECONOMICS: FOMC Remains on Taper Track as Recovery Plods on But Jobs, Housing Still Lag

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FOMC continued to taper with a QE cut of $10 billion, as expected. There were no big surprises in the statement. The Fed still sees rates staying low for a "considerable time" after QE ends. The Committee said growth in the economy rebounded in Q2, as just evidenced by the GDP report, and noted an improved labor market. However, it indicated that "a range of labor market indicators suggests that there remains significant under-utilization of labor resources." The Fed also noted "inflation has moved somewhat closer to the Committee's longer-run objective," but also said longer-term expectations remained stable. So on the one hand, outlooks on growth and inflation were nudged up a bit, but were offset by some dovish commentary. There was a new twist as Philly Fed's Charles Plosser dissented, objecting to the forward guidance with the "considerable time" phrasing.



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