Fed Believes U.S. Labour Market is Stabilising

The Fed decided to leave its interest rate at 0.25%, but the policy statement is what has investors really considering the situation right now. The Fed did say that it would still need an extended period of low rates, but the other contents of the statement indicate that maybe things are improving.

Indeed, one of the biggest concerns has been the labour market in the U.S. However, spread betting and contracts for differences should consider that the Fed seems to think that it is stabilising. GFT's Kathy Lien reports in FX360 on what the Fed thinks about the economy:

The Fed now believes that the labor market is stabilizing, which is an upgrade from their prior comment that said the deterioration in the labor market is abating. The central bank no longer thinks that the labor market is weak and only that unemployment is high. They were encouraged that business spending has risen significantly but were concerned that housing starts have been flat. Back in January, they did not mention housing and the return of these concerns following this morning’s weak housing starts number suggests that weather is not only factor hampering housing start - tight credit remains a persistent problem.

Credit is going to have to loosen a bit more for the U.S. to recover better, but it does appear that the employment hurdle is almost got over.