Throughout the FOMC meeting, participants have attested that the overall economic conditions of the world's largest economy are enhancing and improving, still many points have to be focused on and several challenges to face to continue a march towards a full economical healing from the unending downside pressures of the recession.
On one hand a part of the members believed that the banks of the country should try to lower their levels of reserve balances by purchasing securities or by easing their credit standards and terms to favorite an expansion of the lending and mobilize the liquidity process to a further extent to support overall growth, whereas on the other hand, other participants are convinced that the declining demand for reserves may be putting downward pressures on yields
Now, it has been clearly confirmed that many sectors are improved throughout this past period, having the factory output for July and August rising in July as the consumer spending on motor vehicles was boosted that period and household spending climbing up to the upside.
Furthermore, investment in equipment and software (E&S) is stabilizing to a certain extent and the industrial production rose in July and August, while that the sales and construction of single-family homes during July reached levels much higher than the levels of the beginning of the year but remain quite low, recovering therefore at a real slow pace from the crisis.
In fact, the major obstacle continues to be the key sector; the labor market, which remains deteriorated with the highest unemployment rate in 26 years, still the members declared that the rise in the unemployment rate has slowed throughout its pace compared to the beginning of this year.
As we could see, the overall economic outlook of the U.S has brightened and the conditions of the financial have improved further, while the activity in the housing sector is rising and the household spending stabilized but remains under pressure from the ongoing deterioration of the labor market and tight crediting, encouraging accordingly the Federal Reserve to continue on using several tools to promote economic recovery and maintain price stability.