There’s still no end in sight for the Federal Reserve’s stimulus program — known as quantitative easing — after the central bank met this week and decided to continue buying $85 billion in bonds each month.
In a statement released after the conclusion of its policy meeting, the Fed pointed to fiscal policy (aka government spending cuts, the shutdown and debt ceiling debate) as “restraining economic growth.”
While the Fed continued to characterize the overall economy as expanding at a “moderate pace” — the same as at its prior meeting — it did downgrade its assessment of the housing market slightly.
“The housing sector slowed somewhat in recent months,” the statement said.
The central bank has been buying $85 billion in bonds every month since September 2012, and has said it will continue to do so until the job market improves “substantially.” The program is now nearing $1 trillion in total, yet that goal remains elusive.
Sure, the unemployment rate, at 7.2 percent is slightly lower than it was, but so too is the country’s labor participation rate. Only 63 percent of Americans ages 16 and over either have a job or are looking for one — the lowest level since 1978.
Meanwhile, hiring is stuck in slow motion, averaging 185,000 new jobs added in each of the last 12 months. Overall, not much has changed in the job market since last year.
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