Fed opens 2-day policy meeting

The Federal Reserve opened a two-day monetary policy meeting Tuesday, with the central bank expected to keep its stimulus programs in place. The Federal Open Market Committee began the meeting in the early afternoon, a Fed official said. Six weeks after breaking out a new bond-buying program labeled QE3 to shore up the economy, analysts see little reason to expect the FOMC to reverse direction. The signs of recovery remain too feeble, and the overhanging risks too many -- the US election on November 6 and the \"fiscal cliff\" crunch, the eurozone crisis and China\'s slowdown -- to justify a policy change. \"The recent upturn in economic activity is not enough to force the Fed\'s hand to change now. It is far too soon for the Fed to react and will more likely reaffirm their commitment to QE3,\" said Chris Low at FTN Financial. \"After all, the economy is still adding fewer than 150,000 jobs a month, not enough to cover demographic changes or meet (Fed chairman Ben) Bernanke\'s goals,\" Low said. At its September 12-13 meeting, the FOMC launched QE3 -- a \"quantitative easing\" operation of buying $40 billion worth of bonds monthly to press long-term interest rates lower -- with the express aim of sparking companies to invest and hire. Since then, there was a surprise 0.3 percentage point fall in the national unemployment rate in September, to 7.8 percent -- the lowest level since January 2009. While the baseline number looked good, other figures -- the overall number of unemployed, and those who dropped out of the workforce -- indicated that the US economy\'s jobs machine remains weak. Other data has been mixed: consumer spending seems stronger and consumer sentiment is higher, but industrial production has weakened and exports are down. The FOMC is expected then to talk more about how it will signal its views and intentions -- whether, for instance, to set a specific goal for the unemployment rate, at which it might increase interest rates. Nomura analysts said they expect FOMC participants \"to spend considerable time in furthering the discussion around how to communicate the Fed\'s intention and craft a consensus forecast,\" as well as what they will do when a previous stimulus program dubbed Operation Twist ends at the end of this year.