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Fed cuts forecast, mixed atmosphere on Wall Street
2013-12-12 12:09

  It was a day of expectations what information the Federal Reserve would provide. Some news made glad whereas some disturbed. As a result small variability of indexes occurred in New York.
Markets focused on the message of the Federal Open Market Committee. From the beginning, there was little variation and the indexes oscillated around Tuesday's closing levels. Slight increases in New York began after FMOC Communication which has decided to extend the operation Twist by the end of the year. Interest rates were not changed. Operation Twist which consists in swap short-term government bonds for the long-term will last longer. This is designed to reduce the profitability of long-term securities, which will encourage banks to lower mortgage rates and boost the property market.

However, during later press conference, Ben Bernanke dampened such little optimism of players. Chairman of the Fed said that the U.S. Federal Reserve lowered its economic growth forecast in the USA for the current and next year. Fed's new forecast assumes GDP growth in 2012 of 1.9 to 2.4 percent. Early American central bank's forecast of April talked about GDP growth of 2,4-2,9 percent in 2012. In the Fed's assessment growth in 2013 will be of 2,2-2,8 percent. Previously, the Fed assumed an increase of 2,7-3,1 percent in 2013. At the same time Bernanke said that the Fed is ready for further action, which may include another round of quantitative easing, if the slowing U.S. economy will get worse.
At the finish the stock exchange fell slightly, but the changes were small. Dow Jones declined by 0.10 percent, a broad market index S&P500 fell 0.17 percent. Nasdaq, which resisted decreases, gained 0.02 percent.

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