...no change to easy money

US Federal Reserve signals no change to easy money

The US Federal Reserve has signalled no change in its loose monetary policy.

The central bank concluded its latest two-day policy meeting saying interest rates would remain near zero and its plan to buy $600bn of US government debt would proceed as scheduled.
The bank's rate-setting committee said the recovery was still too slow to bring down unemployment quickly.
It noted the recent rise in commodity prices, but said underlying inflation was still falling towards zero.
The Fed reiterated a previous warning that economic conditions were "likely to warrant exceptionally low levels for the federal funds rate for an extended period".
None of the policy committee's members disagreed with its decisions or its statement.
Borrowing costs Markets had largely anticipated the non-event, although there had been some speculation the Fed would curtail its programme of "quantitative easing" - injecting cash into the financial system by buying up government debt.
US government bond prices have been falling steadily in recent months in response to the economic recovery and higher inflation expectations, leading to a general rise in borrowing costs in the US.
Following the announcement, they rallied briefly - as investors realised that the Fed was going to continue with its debt buying programme in full - before falling back again.
"This isn't a surprise to anyone in the industry," said Frank Hsu of New York brokerage Fimat.
"But if they are still going forwards with [quantitative easing]... [banks] will have to change their lending standards, if [quantitative easing] forces them to lend out money rather than holding it."



bbc.co