The US Federal Reserve said the economy is doing a little better but noted significant downside risks from the eurozone crisis and kept monetary policy firmly on hold, the FT reports. Its statement on Tuesday, little changed since November’s, means that the rate-setting Federal Open Market Committee will hold fire on any further easing and await developments in the new year. The FOMC is caught between stronger economic data in the US and uncertainty about what will happen in Europe. “The Fed is maintaining the status quo, noting some improvement in the jobs market, but the big risk remains Europe,” said Greg McBride, senior financial analyst at Bankrate.com. “We’ve actually seen better data on the US economy but nobody’s noticed because of the financial tension emanating from Europe.” Recent data on consumption and business confidence has raised hopes of stronger growth next year but much depends on whether Congress extends a 2 percentage point reduction in payroll taxes into 2012.
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