The Fed released their unchanged interest rate decision today at 2:00pm EST. The Committee noted “signs of improvement” in the labor market as well as a “return to moderate economic growth following a pause late last year”. However, the Committee also noted that “fiscal policy has become somewhat more restrictive”.
During the press conference, Bernanke stated that the Fed will adjust purchases only when conditions have changed meaningfully. The chairman stated that “obviously there [have] been improvements” in the US economy over the last 3-4 months, but questioned whether the economic upturn was temporary or sustainable. When questioned about Cyprus, Bernanke announced that the situation is not “a major risk to the US financial system and economy”. When asked about improvements in the stock market, Bernanke clarified that the Fed is “not measuring success in terms of the stock market”.
The 10-year Treasury currently stands at 1.95%; up 5bps on the day.
FOMC Word for Word Changes 03.20.13