Fed stands pat, but offers hint of further action soon

Despite acknowledging the evident slowdown in US economic growth, the Fed declined to take any additional action at the conclusion of the two-day FOMC meeting today. It did, however, offer a hint that it might be prepared to do more at the next meeting in mid-September. A new round of large-scale asset purchases is still the most likely option, but we wouldn't rule out a cut in the interest rate payable on excess reserves or the introduction of a new "Funding for Lending" programme.