FOMC Minutes Send US Equities Lower
Federal Open Market Committee meeting minutes were released earlier today. According the Fed's statement, several FOMC members saw a need for additional stimulus, if the US economy loses its momentum. In addition, one of the participants was in favor of extending the Operation Twist.
Fed also stated that it sees the US economy expanding modestly and that its outlook is similar to the March FOMC meeting. However, most FOMC members expect it to take five to six years to close the unemployment gap. Most of the members also expect inflation to drop to the target level or below it.
All FOMC members were expecting Fed's balance sheet to be normalized in a manner that is consistent with the principles outlined at June 2011 FOMC meeting. Lastly, Fed said about half of the FOMC participants believe that exceptionally low funds rates would be appropriate at least until late 2014.
The US equity markets mover significantly lower after the FOMC minutes were released. All major indices are trading near the session lows. Dow Jones is currently at 12,616.11 down 15.89 or 0.13%; S&P 500 at1,326.04, down 4.62 or 0.35%; and Nasdaq at 2,873.74 down 20.02 or 0.69%.
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