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Barack Obama

Softer biz investment bothers Fed

Wednesday, October 24, 2012 - 01:31

Oct 24 - The Federal Reserve says growth in business investment is slowing, one factor prompting policymakers to continue the Fed's $40 billion debt buying plan to boost the U.S. economy. Bobbi Rebell reports.

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The Fed acknowledging what investors have been hearing from corporate America in their earnings reports: growth in business investment is slowing- even as household spending and the housing market are showing improvement. The statement came at the end of the Federal Reserve's regular two-day meeting, along with the expected repeat of its promise to keep interest rates low through at least mid-2015. Stocks fell but then recouped their losses after the statement- still closing down for the day. Fact and Opinion Chief Economist Bob Brusca: SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "We are at a period where the Fed chairman has been trying to get the stock market to rise. Well, gee, we've seen some real instability in the stock market recently and we really don't know what it's about. Is it fear about the fiscal cliff? Is the economy really slowing down? Is it about earnings? But with all of these problems and the Fed acknowledging there's a slowdown in capital spending it seems the chairman's got a real hard time getting the stock market to advance in this kind of a climate." The Fed made no change in its plan to purchase $40 billion in mortgage-backed debt per month - to push rates lower and drive a stronger recovery. But Brusca was baffled as to why they did not focus on the falling unemployment rate. SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "That's a big surprise. I mean the Fed has chosen to really downplay the drop in the unemployment rate. It created a real stir when it came out and of course it's right in the middle of a big political debate about whether the economy is picking up or not and whether Obama deserves credit for this or not and the Fed has just sort of submerged it." This was the final Fed meeting before the Presidential Election on November 4th.

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Softer biz investment bothers Fed

Wednesday, October 24, 2012 - 01:31