“To begin to taper, I have two tests that must be passed: (1) evidence that the labor market has shown improvement and (2) information about the economy’s forward momentum that makes me confident that the labor market improvement will continue in the future. So far, I think we have made progress with these metrics, but have not yet achieved success.” Federal Reserve Bank of New York President William Dudley said recently in remarks at Fordham University.
And while the unemployment rate continues to improve, down to 7.3 percent in September, uncertainty in the long term direction of the economy led the Federal Open Market Committee to decide to continue purchasing $85 billion per month in securities at their recent meeting. In addition trends in personal consumption, housing and private business investment helped lead to the decision. Continue reading