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FOMC lowered growth projections through 2013

November 3, 2011

The FOMC lowered projections for growth through 2013 and raised unemployment projections; the Committee made no policy changes but Chairman Bernanke confirmed willingness to ease further, although he did not indicate a timeline or particular triggers; the main policy tools available at this stage are more asset purchases and enhanced communication.

The FOMC did not alter the current course for monetary policy and maintained an easing bias amid concerns about growth, remaining "prepared to employ its tools to promote a stronger economic recovery in a context of price stability.” In the press conference following release of the economic projections, Fed Chairman Bernanke said that although US economic growth was moderate in Q3 and is expected to remain at a similar pace in Q4, the medium-term outlook for the economy as seen in the Fed’s projections remains unsatisfactory. Thus the Fed remains open to providing additional stimulus if they conclude that action could provide better economic outcomes. Chairman Bernanke said that the Fed’s two main tools for providing more accommodation at this juncture are enhanced communication and more asset purchases.



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