Daily News: January 25, 2012

Fed to Hold Rate Low Through 2014


The FOMC reported that since it met in December economy has been expanding moderately, notwithstanding some slowing in global growth.

The FOMC said it expects to maintain a highly accommodative stance for monetary policy. In particular, the committee decided to keep the target range for the federal funds rate at 0 to 0.25% and currently 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.

While indicators point to some 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. Strains in global financial markets continue to pose significant downside risks to the economic outlook, the FOMC said.

To read the full FOMC news release, click here.