Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
March 5, 2015

Fed Calls Out Lawmakers on Shutdown

The Federal Open Market Committee released the policy statement from its October meeting, which continued to delay tapering of the quantitative easing program, but included a veiled reference to delayed economic data due to the government shutdown.

Key language (emphasis added): “Information received since the Federal Open Market Committee met in September generally suggests that economic activity has continued to expand at a moderate pace… Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months.”

Neil Irwin: “The Fed thought the recovery was going okay back in the summer, so signaled a taper. That signaling drove a sell-off in markets. That sell-off drove up interest rates, and so the Fed decided not to taper in September, after all, worried about tight financial conditions — tight financial conditions that the Fed itself had brought on!”

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