(MENAFN– ecpulse) This week the Federal Open Market Committee ended its two-day monetary policy meeting revealing that the Federal Reserve maintained its monthly $85 billion of bond purchases although they attested that the previous economic activity witnessed some enhancement and agreed once again to keep its benchmark interest rate unchanged at a record low between 0.0% and 0.25%.
In fact the central bank left unchanged its statement that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent.
On the other hand Chairman Ben S. Bernanke is seen to persist on the super-easy accommodative policies into his final months as Chairman, on the basis of protecting the four-year expansion from the impact of tightening monetary policy, and the effects of this month’s partial government shutdown.
The 16-day closing resulted in the furloughs of as many as 800,000 federal workers and delayed release of data the Fed says it needs to evaluate the economy.
Following the day of the release of the Fed’s statement, the U.S. dollar index jumped to 79.82 from 79.55. The Dollar Index measures the value of the U.S. dollar against a basket of other major currencies such as the Euro, Pound Sterling and the yen.
Moreover Fed repeated that inflation “has been running below the committee’s longer-run objective but longer term inflation expectations have remained stable.”
Plus it predicts prices to remain below its 2 percent target over the near-term, which would help policymakers to hold their $85 billion monthly bond purchases for while maintain monetary stimulus when they meet wrap up a two-day meeting on Wednesday.
And this week a report showed that the CPI; broadest measure of inflation in the United States, soared 0.2 percent last month after gaining 0.1 percent in August, matching projections while that Core CPI, which excludes volatile food and fuel, rose 0.1 percent, lower than projection.
While that this week as well Producer price index, one of the main three gauges of inflation used in the U.S., slipped in September, defying analysts’ expectation of 0.2 percent rise and the Core PPI, which excludes volatile food and fuel, soared 0.1 percent after remaining steady a month earlier.
On the other hand this week a report showed that U.S. private-sector employers added lower than forecast jobs in October, adding to the case the Fed would extend its stimulus program to 2014.
Private employers added 130,000 jobs this month, after adding a prior 166,000 in September, according to data today from the ADP Research Institute in Roseland, New Jersey.
Not forgetting that American employers added 148,000 workers in last month, following an upwardly revised 193,000 gain in August. Analysts had predicted a gain of 180,000 jobs.
Unemployment rate, on the other hand, slipped to 7.2 percent, the lowest in nearly four years, compared to both prior and expected readings of 7.3 percent, the NFP report showed.
Another report released this week showed that the country’s retail sales witnessed cheerfully a 0.4 percent advance in the reading without auto dealers from 0.1 percent advance in August, moving in line with median forecast. Yet, total sales plunged 0.1 percent.
Among the 13 categories included in calculations, nine showed advance in September, thanks to an 0.7 percent gain at electronics dealers, as well as 0.9 percent rise at both grocery stores and restaurants.
Also this week the U.S consumer Confidence, which assesses consumer sentiment regarding business conditions, employment and personal income throughout the world’s leading economy, plunged unfortunately and unexpectedly in October to 80.2. in October from a prior revised reading of 80.2 from 79.7. Analysts called for a rise to 75.0.
And accordingly the sub-index for three month average conditions plunged as well to 77.7 in October from 80.2 in September and 81.8 in August while that the present situation sub-index dropped as well to 70.7 from 73.5.
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