Fed Keeps Stimulus in Place
In a news release, the FOMC said that since it last met in March economic activity has been expanding at a moderate pace.
The committee said it will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month, and employ other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability.
The FOMC said it will increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In addition, the committee said it expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.
The committee will keep the target range for the federal funds rate at 0% to 0.25% and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the committee’s 2% longer-run goal and longer-term inflation expectations continue to be well anchored.
To read the FOMC’s news release click here.