September 19, 2018

Federal Reserve Notes Steady U.S. Economic Growth

Federal Open Market Committee and the Governors of the Federal Reserve Board met on Oct. 28-29. Their next meeting will be in mid December.

Federal Open Market Committee and the Governors of the Federal Reserve Board met on Oct. 28-29. Their next meeting will be in mid December.

Fed. Concerns: Market Unrest, Overseas Weakness

October meetings of the Federal Reserve dwelt on turbulent financial markets and overseas weaknesses, but these items failed to deter the fed from going ahead with plans to end landmark bond buying.

Recently released minutes from the meeting showed that the agency was concerned about fluctuations in U.S. stock prices and in economic wavering in Europe and Asia. Inflation, which has been held below 2 percent, could go even lower because of falling energy prices and strengthening of the dollar.

If the Europe and Asian economies continue to dip, it could have a dampening effect on U.S. growth, although the nation’s finances are deemed to be on solid footing and expected to keep improving.

When the fed announced in September that an increased interest rate would be delayed, Wall Street experienced a big rally. The October viewpoints seem to have had little effect on the market. It is now anticipated that the rate hike will take place next June, depending on how the data fall out between now and then.

Based on information coming out of the October meeting, most private economists are taking a mid-2015 rate increase as most likely.

The Fed has been gradually decreasing its bond-buying program since last December. It was a move aimed at keeping long-term interest rates low. Improved employment statistics has promoted a decline in the program, an indication that the Fed is less concerned with the labor market.

Most participants of the meeting agreed that economic activity continues to expand at a moderate pace.

They reported that the recent decline in energy prices will provide a nice boost to consumer spending in the near future. Lower-income households in particular will benefit. Low interest rates, rising consumer confidence and a decline in the levels of household debt to income ratio are part of what will make the coming months look brighter.

About Twila Van Leer

Journalist/writer for more than 50 years. Pulitzer Prize nominee, 1983 for coverage of the first permanent artificial heart. More than 50 national, regional, local awards for news writing. Main writer for a memorial book for Deseret News' 150 th anniversary and for a book recounting the 1997 re-enactment of the pioneer trek from Omaha to Salt Lake City. Co-writer and editor of "True Valor," a book on the history of the artificial heart. Author of the book, Life Is Just A Bowl Of Kumquats, a wonderful story of a house wife and her trials with raising a large family.