FOMC Issues Statement: Economy Has Been Expanding Moderately
WASHINGTON (1/25/12) In their first meeting of 2012, the Federal Reserve's policymakers announced they will maintain a "highly accommodative stance for monetary policy" by keeping the federal funds target rate at near zero levels likely through at least late 2014.
In a statement after its two-day meeting, the Federal Open Market Committee
(FOMC) said that since it met in December, the economy "has been expanding moderately, notwithstanding some slowing in global growth."
The committee noted that while indicators point to further improvement in overall labor market conditions, the unemployment rate remains elevated.
"Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable," said the FOMC statement.
In maintaining its dual mandate to foster maximum employment and price stability, the committee said it expects "economic growth over coming quarters to be modest" and consequently anticipates that the unemployment rate will decline only gradually toward levels that the committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the committee's dual mandate.
"To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the committee expects to maintain a highly accommodative stance for monetary policy." The FOMC decided to keep the target range for the federal funds rate at 0% to 0.25% and said it anticipates "that economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."
Federal Open Market Committee Statement
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