Nov. 4, 2009 – 1:30 p.m. CT

No News from the Fed

Today, the Fed defended its position to hold interest rates at close to zero and continue to expand its balance sheet through the first quarter of 2010. The Fed acknowledged that growth has improved, but not enough to stem the upward pressure on unemployment or the downward pressure on inflation.

Do not expect the Fed to raise rates until unemployment starts its descent, which is not likely until well into 2010. Our forecast for the Fed to increase rates later in the second half of 2010 still holds.

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