A comparison of the Federal Reserve’s statements from its two-day meeting that ended Wednesday and its meeting September 16-17:
BOND PURCHASES:
Now: The Fed “continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month.”
Then: The Fed “decided to make a further measured reduction in the pace of its asset purchases,” to $15 billion a month.
JOBS:
October: The Fed has much more positive view of the job market: “Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labour market indicators suggests that underutilization of labour resources is gradually diminishing.”
September: “Labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labour market indicators suggests that there remains significant underutilization of labour resources.”
INFLATION:
October: The Fed still sees inflation as likely to stay near its 2 per cent target, despite lower oil and gas prices: “Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 per cent has diminished somewhat since early this year.”
September: The Fed “sees the risks to the outlook for economic activity and the labour market as nearly balanced and judges that the likelihood of inflation running persistently below 2 per cent has diminished somewhat since early this year.”
INTEREST RATE INCREASES:
October: The Fed added a new qualification about the timing of a rate increase: “If incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.”
