New York, New York (PressExposure) August 16, 2009 -- "Source One International": The US Federal Reserve left global markets scratching their collective heads after it issued a statement after a 2 day meeting of the Federal Open Market Committee (FOMC).
Whilst analysts at "Source One International" were not expecting any movement in the Fed Funds rate which was predictably held in the range of 0 - 0.25%, they, like many others, were awaiting some kind of indication as to whether the US central bank was going to end its program of buying long-dated treasuries at the end of September as planned.
Instead, the Fed's statement amounted to little more than "We're not sure" said a source close to analysts at "Source One International".
Most economists had expected the Fed to end the program following better-than-expected numbers on unemployment and manufacturing growth but worse than expected retail sales data released the following day showed that the consumer has yet to return in sufficient numbers to call off the stimulus.
The US dollar tried to rally but was forced back down as the market digested the outlook.
"Source One International" had expected the Fed to announce the extension of its program in line with the Bank of England's decision last week to buy another Â£50bn ($84bn) of long-dated UK treasuries to get more credit flowing through its beleaguered economy but it merely indicated that it would buy treasuries up until the end of October 2009 with a re-evaluation at its next meeting.