Bloomberg reports the Federal Reserve's monetary policy decision.
The Federal Reserve restated its intention to cease buying $1.25 trillion of mortgage-backed securities in March and maintained its pledge to keep interest rates near zero for an “extended period,” opening a rift among policy makers for the first time in a year.
Kansas City Fed President Thomas Hoenig dissented, saying the time had come to change the promise to keep rates low. The economy “has continued to strengthen,” the Fed said in a statement today in Washington, “although the pace of economic recovery is likely to be moderate for a time.”
Data on new home sales in the US show that the economic recovery remains fragile. From Bloomberg:
Sales of new homes in the U.S. unexpectedly dropped in December, capping the worst year on record and signaling the government’s tax-credit extension has yet to shore up demand.
Purchases declined 7.6 percent to an annual pace of 342,000, marking the fourth decrease in the past five months, the Commerce Department said today in Washington. For all of 2009, sales declined 23 percent to 374,000, the lowest level since records began in 1963.
Nevertheless, trade data from Japan show that the global economic recovery has been substantial. Again from Bloomberg:
Japan’s exports rose for the first time since Lehman Brothers Holdings Inc. collapsed 15 months ago, adding to signs that the world’s second-largest economy is recovering from the global recession.
Shipments abroad climbed 12.1 percent in December from a year earlier, the Finance Ministry said today in Tokyo. The result beat the median estimate of a 7.6 percent gain in a Bloomberg News survey...
Imports slid 5.5 percent in December from a year earlier, the smallest drop in 14 months, today’s report showed. Japan posted a trade surplus for an 11th straight month, totaling 545.3 billion yen ($6.1 billion).