The stock market is still in a post-Fed funk, with the S&P 500 down 9 points or 0.5 per cent, just over an hour after the central bank released its latest policy statement.
But if ongoing Fed stimulus, in the form of quantitative easing, is what investors want then the Fed has delivered. Here's what several economics make of the statement – and note that no one sees tapering starting any time soon.
Ian Shepherdson, Pantheon Macroeconomics: "This meeting was essentially a holding operation, given the uncertain impact of the government shutdown on both the current state of the economy and the near-term outlook, so the statement is little changed from September. The key point is that the Fed again 'decided to await more evidence that [labor market] progress will be sustained' before tapering. We still expect no tapering before June."
Avery Shenfeld, CIBC World Markets: "It no longer sees bond yields as threatening, having dropped the reference to an undesirable 'tightening in financial conditions' that was in the last statement. That's one precondition for tapering to begin, but the Fed still seeks 'more evidence' that a pickup will be sustained before its willing to taper bond buying, repeating the need to see ongoing labour market improvement and a move back up in inflation. January would still be a potential first tapering if, as we expect, economic data show improvement around the turn of the year."
Paul Ashworth, Capital Economics: "But if officials are trying to downplay the impact of the shutdown and are happier with the level of long-term interest rates, then perhaps a December taper isn't quite as out of the question as we had previously thought. We still think sometime early next year is the most likely outcome, but the balance of risks just shifted a little."
Paul-André Pinsonnault/Krishen Rangasamy, National Bank: "Perhaps more relevant to the Fed's QE program, the labour market is decelerating and inflation is lagging. October's non-farm payrolls (due next week) should also be weak based on the earlier-released ADP. While we may see some rebound in employment later, there may not be sufficient evidence of a sustainable improvement before year end to prompt the Fed to change its stance so soon. All told, today's statement does nothing to change the market's view that QE tapering will only start in the first quarter next year."