Fed Sees Moderate Economic Growth; Holds Rates Steady
The FOMC reported that since it met in January the economy has been expanding moderately and that global financial strains have eased but continue to pose significant downside risks to the economic outlook. The Committee said it likely will keep the target range for the federal funds rate at 0 to 0.25% through 2014.
The Fed noted that household spending and business fixed investment have continued to advance but that the housing sector remains depressed. The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September and is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.
To read the FOMC’s news release, click here.