The Federal Open Market Committee (FOMC) will end its quantitative easing (QE3) this month, as planned, despite the risk of weaker global economic growth and recent turmoil in global financial markets. The Fed sees the U.S. economy on track thanks to “solid” employment gains. Nevertheless, the central bank maintained its commitment to keep interest rates low for a “considerable time.”
The Fed’s decision was as expected and left the S&P500 and Dow Jones indices nearly unchanged. The outlook for continued low official interest rates in the U.S. and a strong possibility of a further extension of the ECB’s expansive monetary policy should give equity markets in Europe a friendly start. Today, markets are awaiting a first glance at U.S. economic growth in the third quarter. Analysts predict a slightly lower annualized growth rate of 3.0%, compared to 4.6% in the previous quarter.
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