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Lenders continued to face headwinds in the third quarter as consumer loan demand weakened slightly in some parts of the country while others saw a small boost, according to a Federal Reserve Board report released Wednesday.
October 16
WASHINGTON Federal policymakers on Wednesday agreed to postpone unwinding their current bond buying program until amassing further evidence of a strengthened economic recovery.
After a two-day Federal Open Market Committee, officials said they decided to "await more evidence" that the U.S. economy was advancing before changing course on its $85 billion monthly bond buying program.
While labor market conditions had shown some improvement, the unemployment level remained "elevated," according to the Federal Reserve Board's policy statement. Recovery in the housing market had also "slowed somewhat" in recent months and there was a continued drag caused by uncertainty tied to the future of U.S. fiscal policy.
Fed officials in September opted to hold off scaling back on its controversial bond-buying program, surprising investors given the possibility of a government shutdown and looming budget battles on Capitol Hill.
Policymakers reiterated plans to continue to closely monitor incoming economic data in the coming months and would continue their plans to buy Treasury and agency mortgage-backed securities until the outlook for the labor market had "improved substantially."
"In judging when to moderate the pace of asset purchases, the committee will, at its coming meetings, assess whether incoming information continues to support the committee's expectation of ongoing improvement in the labor market conditions and inflation moving back toward its longer-run objective," officials said in the policy statement.
Officials again reiterated that asset purchases were "not on a preset course" and the committee's decision would be based on its economic outlook.
Policymakers reaffirmed that a "highly accommodative" policy would remain appropriate for a "considerable time" even after they put an end to their asset purchase program and the economy strengthened.
Consistent with past decisions by the committee, Esther George, the president of the Federal Reserve Bank of Kansas City, was the only member to dissent with the Fed&'s policy, citing concerns of a continued high level of monetary policy accommodation.
