Wednesday, October 25, 2006

Federal Reserve leaves rates on hold....

The Federal Reserve left rates unchanged today at 5.25%. This was widely expected in the financial markets. The statements were as follows:

Inflation pressures were likely to lessen due to contained expectations.

Inflation pressures are likely to moderate, partly due to less impetus from energy prices.

Economy seems likely to expand at a moderate pace in future.

Economic growth has slowed over the course of the year, partly due to a cooling housing market.

INFLATION RISKS REMAIN, EXTENT, TIMING OF ANF ADDITIONAL FIRMING DEPENDS ON EVEOLUTION OF OUTLOOK.

This last statment was key as it allowed the Bond market to rally as the Fed signaled vigilence in fighting inflation. Bottom line nothing is going to change near term. U.S. rates are on hold.

FXTRADINGIDEAS@AOL.COM

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