Anyone hoping for fireworks from Federal Open Market Committee's April meeting will be very disappointed: its statement reveled nothing new. Really, this makes sense. The U.S. economy has not changed much since early March, when the FOMC last met. In short, it sees the recovery continuing at a modest pace, the unemployment rate remaining annoyingly high, and little reason to alter its monetary stimulus program it started in November.
One of the big questions the market had this month for the Fed was whether it would extend its monetary stimulus of approximately $75 billion in Treasury purchases per month, initiated in November. The committee says probably not. Specifically, it states that it will complete its purchase program in June, on schedule. That implies no additional stimulus program will follow, though it will continue to reinvest cash received from its maturing assets, probably past June.
But the statement also indicates that it will continue to monitor its securities holdings and "is prepared" to "adjust" them "as needed" to achieve its objectives of price stability and maximum employment. So the Fed doesn't exactly leave the door open for another monetary stimulus effort, but does leave it cracked.
Just as these words could be interpreted to say that additional stimulus is possible if the economy needs it, you could also take them to mean that tightening could begin if the recovery picks up dramatically. After all, adjusting its portfolio could also imply selling assets -- not just buying them.
There's really nothing else interesting to note in this statement. It very closely resembles what the FOMC said in March. But the fun isn't over yet for monetary policy observers. Today at 2:15pm EST, Chairman Ben Bernanke will host a first-time-ever press conference. Although it's billed as being for the purpose of presenting and discussing the Fed's latest set of economy projections, you can be sure that reporters will ask more probing questions beyond the Fed's assumptions for why they believe unemployment will be X% in 2012. It's just not clear whether Bernanke will provide meaningful answers to deeply probing questions, but some may enjoy watching him squirm.
So stay tuned, as the spotlight remains on the Fed through the afternoon. (Watch the press conference here at TheAtlantic.com -- we'll stream and live blog it when it begins at 2:15pm!)
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