Fed Leaves Rates Unchanged; Says Economy Improving

Today, the Federal Open Market Committee released its decision on interest rates. The FOMC voted 9-1 to leave rates unchanged. The lone dissenting vote was Richmond's Jeff Lacker, who argued that there is no need for the Fed's promise to keep rates exceptionally low through 2014. In its statement, the Fed said that household spending and busines investment have been advancing. The Fed said that it was expecting the economy to experience moderate growth. In terms of inflation, the Fed acknowledged that it should pick-up in the short-term, due to the rising price of crude oil and gasoline. Still, the Fed stated that inflation remained at or below levels consistent with its mandate. The Fed also stated that long-term inflation expectations are steady. On Mortgage-Backed Securities, the Fed said that it would continue to reinvest its holdings. Overall, the Fed promised to keep rates near 0% through 2014. The Fed concluded that strains on the global market have eased, but warned that risks persist. The market was little changed on the release, while gold pulled back slightly.