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NEW YORK ( TheStreet) -- There are many important headline stories having an impact on all investors as we reach the mid-point in December.
One of these was the outcome of the
Federal Reserve's Open Market Committee's quarterly meeting leading to mostly encouraging news.
Wednesday, "The Federal Reserve ramped up its stimulus to the economy on Wednesday, expressing disappointment with the pace of recovery in employment as contentious U.S. budget talks heighten uncertainty about the outlook."
The report explained, "The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September."
That's a total of $85 billion per month.
There was even a surprise element to Ben Bernanke's iteration of the FOMC policy decisions. The Fed decided to embrace numerical thresholds for policy, a step that had not been expected until early next year. These included targets concerning employment and inflation which the Fed is aiming for.
TheStreet.com's Director of Research Stephanie Link was asked in a recent
CNBC interview her views on how the FOMC's policies and Bernanke's press conference might impact upon the financial markets. Link was referred to as "the trader [who] follows the short-term swings." The interview is multi-faceted and well worth listening to.
Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.
To be more specific, the Fed said it will likely keep official rates near zero until the unemployment numbers fall to or below 6.5%. It also earmarked inflation, saying the 0% official rate would continue because we're between one and two years ahead of the time where it projects inflation would not exceed 2.5% and long-term inflation expectations remain contained.
Speaking of the cost of things, import prices recorded the biggest drop in five months in November as food and fuel costs fell, keeping inflation at bay against the backdrop of an economy on the ropes.
The Labor Department said on Wednesday import prices fell 0.9% after three straight months of gains. October's data was revised to show a 0.3% increase rather than the previously reported 0.5% gain.