Federal Reserve's Federal Open Market Committee held a two-day policy meeting June 21-22, 2011, and subsequently on June 22, Fed Chairman Ben Barnanke held his second formal press conference, where he expressed that even Fed policymakers had been surprised by the stalling economic growth. The meeting was held in the backdrop of wrapping up and winding down of QE2 program in the month of June, 2011. The Federal Funds rate was left untouched at historic low. The press conference attracted huge interest from the traders and financial circles as Barnanke began it first time in Fed's 98-year history on April 27, 2011.
FOMC held its another round of meeting on November 1-2, 2011, and at the end of the two-day meeting, decided to stay put. However, Bernanke gave a gloomier estimate of the economy:
* Projected GDP growth 2.5%-2.9% (revised from June estimate of 3.3%-3.7%) in 2012
* Projected GDP growth 3.0%-3.5% (revised from June estimate of 3.5%-4.2%) in 2013
The jobless rates are projected at least 8.5% by the end of 2012, at least 7.8% by the end of 2013, and at least 6.8% by the end of 2014.
The vote to stay put was 9 to 1, with Chicago Fed President Charles Evans dissenting to mark his voice in favor of doing more and against the Fed's too cautious stand on inflation. This is the first time since 2007 that ant Fed member had dissented voicing support for doing more.
Tuesday, August 23, 2011
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