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Fed stimulus may continue amid shutdown

Posted on Tuesday, October 15, 2013 at 11:44:38 AM

Every sort of American - from homebuyers to workers to the average consumer - have been feeling the effects of the partial government shutdown.

Since the impasse began in early October, the impact of the shutdown has been widespread - perhaps influencing the decisions made by the U.S. Federal Reserve regarding their tapering policy. At the moment, homebuyers looking for residential financing may find the process slower than usual while a number of government organizations are either closed or operating with skeleton crews.

The economic impact most likely means the Fed will continue its bond-buyback policy, which is intended to stimulate consumer activity, according to The Wall Street Journal. The organization won't have access to critical data due to the shutdown, which means changes may not happen. Uncertainty is now commonplace, and it will take time before a clearer picture is established.

Residential financing rates have changing recently, and the Fed stimulus policy is designed to keep them down, the Los Angeles Times reported. While tapering was expected to begin last month, now that plan is on hold for longer.

"It almost certainly means the Fed won't be tapering this year," Mark Zandi, chief economist at Moody's Analytics, told the news source. "The uncertainty will freeze them."

Any future Fed decisions will be closely linked to what happens with the government shutdown, and that could impact consumers across the country.