Hot on the heels of all the market turmoil we've seen in the last several days, the Federal Reserve had its open-market committee meeting this week. One important piece of news that came out of its report was that the Fed has committed to keeping its benchmark interest rate near-zero for the next two years, or at least until the middle of 2013. In the past we had always heard "indefinitely," but now we have an actual date to put on that.
What the Fed chose not to do was to initiate another round of quantitative easing to inject more money into the financial system. This was despite not only the economic problems we've seen in recent weeks, but the fact that the Fed itself ratcheted down its outlook for growth in the near future. It now "expects a somewhat slower pace of recovery over coming quarters."
Was there any good news? In its last report, seven weeks ago, the Fed committee said it was concerned about inflation and watching for its return. Now, the same group says there is a "subdued outlook for inflation."
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