Federal Reserve to Maintain Current Path – Flexible Changes

federal_reserveThe Federal Reserve’s balance sheet has mushroomed more than US$ 3.3 trillion. During the last week of April at the Federal Open Markets Committee, the Federal Reserve maintained their US$ 85 billion a month asset purchasing program with conditions. Interest rates remain at historic lows to accommodate a loose monetary policy.

According to the May 1st reserve statement, “The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.”

Current Federal Reserve policy is targeted to boost asset prices. The Federal Reserve believes current fiscal policy of the United States is partially restraining growth. Federal tax increases and government spending cuts are affecting the job market. According to the ADP National Employment Report, service-providing jobs increased by 113,000 in the United States, the weakest pace of growth in seven months.

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