New Delhi: The US economy has been witnessing a recent crisis that of a crash in its home loan market. Now all eyes were on the meeting of the central bank or the Federal Reserve.
As expected there was no change in interest rates but there was growing pessimism about the US economy.
The US Federal Reserve has left rates unchanged for the ninth consecutive time - the rate hold was widely expected. But the fed statement indicated growing pessimism about the economy.
Leading up to the decision, the talk on Wall Street was whether or not the Federal Reserve was going to address the topic everyone's been talking about the credit crunch. The decision and statement are out.
The statement from the federal reserves indicated two new developments -concern about the tighter credit conditions - and increased risks to growth.
The Federal decision sent Wall Street lower but stocks later recovered. At the close, the Standard & Poor’s 500 stock index was up 0.6 per cent, to 1,476.71, and the Dow Jones Industrial Average gained 0.3 per cent, to 13,504.30.
The NASDAQ Composite index gained 0.6 per cent, to 2,561.60.
The Federal views the current situation less urgently than many on Wall Street do. In testimony to the US Congress in July, the Chairman Ben S Bernanke, said that the central bank is more concerned about rising inflation than a slowing economy.
(With agency inputs)
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