The Federal Reserve did not announce any new stimulus measures at today’s FOMC meeting and left the majority of its statement the same from last month’s meeting.
A couple noteworthy changes included the following:
- the Ben Bernanke-led Fed noted that “economic activity has decelerated somewhat over the first half of this year” rather than the economy “has been expanding moderately”
- it also noted that “The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability” while in June it said “The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability”
- Richmond Fed President Jeffrey Lacker cast a dissenting vote with respect to his preference to “omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate” ; last month he dissented over extending Operation Twist
Following the lack of a QE3 announcement, precious metals remained firmly in negative territory. Gold futures initially dropped to $1,595.00 per ounce and later hovered near the $1,600 level. Silver futures slid to $27.10 per ounce before paring a small portion of their losses to trade near $27.35 per ounce.
As for the Philadelphia Gold & Silver Index (XAU) – which has steadily rebounded since falling to an intra-day low of 145.86 this morning – it remained fractionally lower at 150.45. Notable XAU components in the red this afternoon included Kinross Gold (KGC) and Silver Standard Resources (SSRI), which retreated by 1.1% to $8.22 and by 3.0% to $12.41 per share.
The Fed statement is available at: http://www.federalreserve.gov/newsevents/press/monetary/20120801a.htm