NEW YORK, Nov 2 (Reuters) - The U.S. Federal Reserve left
monetary policy on hold on Wednesday and offered a moderately
brighter economic outlook, but flagged risks to growth that
appeared to leave open the door for further easing.
STORY: TEXT
COMMENTS:
MARK LUSCHINI, CHIEF INVESTMENT STRATEGIST, JANNEY MONTGOMERY
SCOTT, PHILADELPHIA
'The three previous dissenters fell back in line. What is
interesting is that you have a dissenter for more easing. The
market thinks Evans, who seems to be publicly lobbying for more
MBS purchases, might be a canary in the coal mine for further
easing.
'My take-away is that there is a recognition that things
have improved as they had expected. It's a relief more than
anything else. We are clearly not out of the woods. They might
be inclined toward a QE3 but they are waiting for more evidence
that more action is needed. It may be a recognition that they
might be running out of bullets.
'The market is largely treating this as a non-event. This
statement is not reflecting a significant departure from prior
views expressed by Fed officials.'
GENNADIY GOLDBERG, INTEREST RATE STRATEGIST, 4CAST, INC., NEW
YORK
'There doesn't seem to be anything in particular out of the
ordinary. The market was expecting increased communication but
there doesn't seen to be much detail in the statement. Perhaps
Bernanke will elaborate on what they intend to do to increase
communication. It appears that Evans dissented. I was expecting
more.'
'All the talk before the meeting was that they were going
to increase communication on how long rates would stay low and
whether they would tie their policy to specific indicators. I'm
hoping Bernanke will talk more about that at the press
conference.'
OMER ESINER, SENIOR MARKET ANALYST, COMMONWEALTH FOREIGN
EXCHANGE, WASHINGTON
'The initial read suggests the Fed has ever-so-slightly
upgraded its assessment of the economy over the third quarter.
That's not to say significant risks don't still exist. But I
think the headline that says household spending increased and
overall growth strengthened somewhat was, on the margin, a
slight improvement and is giving the dollar a bit of a boost.
For now, it seems QE3 is off the table, and that will put the
focus squarely back on Europe.'
GARY THAYER, CHIEF MACRO STRATEGIST, WELLS FARGO ADVISORS, ST.
LOUIS, MISSOURI
'That we don't have the dissension from the hawks is
encouraging and suggests there might be support for more
quantitative easing at some point, if necessary. It leaves the
door open for more easing.'
'The statement is consistent with the data we've seen
recently showing the economy doing a little better, but with
problems remaining in some areas.'
JOSHUA BROWN, VICE PRESIDENT OF INVESTMENTS AT FUSION ANALYTICS
IN NEW YORK
'There's not much red meat in the statement. We're going to
be more interested in how the press conference goes to see if
he gets asked about GDP targeting. There doesn't appear to be
much in the statement that's different than the expectation.
Absolutely no surprise on the rates.'
MARKET REACTION:
STOCKS: U.S. stocks hold gains
BONDS: U.S. Treasury debt prices slightly extend losses .
FOREX: The dollar trims losses vs euro.
Keywords: USA ECONOMY/FED
(Americas Economics and Markets Desk; +1-646 223-6300)
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