A second-quarter economic rebound did nothing to change the outlook of the Federal Reserve, which stayed the course Wednesday with ultra-easy monetary policy. While the U.S. central bank voted to cut its monthly bond-buying program by another $10 billion, it left its short-term interest rate target near zero and expressed only tepid encouragement about growth. Wall Street expected the Federal Reserve to continue reducing the pace of its monthly bond purchases by $10 billion, which would take quantitative easing down to $25 billion. The Open Market Committee was not, however, expected to move its target for short-term interest rates, currently anchored near zero. There was some thought that the meeting could feature dissent, particularly from Dallas Fed President Richard Fisher, who penned an op-ed piece in the Wall Street Journal this week indicating his dissatisfaction with ultra-easy monetary policy from the central bank. Earlier, the government announced that the U.S. economy grew at a 4-percent rate in the second quarter.
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- Jeff Cox, CNBC