Sunday, May 19, 2013
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FOMC Leaves Rates Unchanged in March
The Federal Open Market Committee (FOMC) made no changes to policy at its March meeting, leaving interest rates at low level and announcing no new actions. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually.” The unemployment rate has declined in recent months but remains elevated.
The target federal funds rate remains at 0 to ¼ percent. The committee reaffirmed its view that policy rates would remain “exceptionally low” through late-2014.
Inflation “has picked up somewhat,” due mostly to higher prices of crude oil and gasoline. Energy prices, however, are expected to influence prices “only temporarily,” and will subside later this year. Longer-term inflationary expectations remain stable.
Policymakers acknowledged some improvement in housing, but also noted that the market remains “depressed.” They also warned that “strains in the global financial system continue to pose significant downside risk to the economic outlook.”
The following is the Fed Funds forecast, with each dot representing the forecast of an individual member.
Chairman Bernankes press conference
Video streaming by Ustream
Read the release.
FOMC Leaves Rates Unchanged in March
The target federal funds rate remains at 0 to ¼ percent. The committee reaffirmed its view that policy rates would remain “exceptionally low” through late-2014.
Inflation “has picked up somewhat,” due mostly to higher prices of crude oil and gasoline. Energy prices, however, are expected to influence prices “only temporarily,” and will subside later this year. Longer-term inflationary expectations remain stable.
Policymakers acknowledged some improvement in housing, but also noted that the market remains “depressed.” They also warned that “strains in the global financial system continue to pose significant downside risk to the economic outlook.”
The following is the Fed Funds forecast, with each dot representing the forecast of an individual member.
Chairman Bernankes press conference
Video streaming by Ustream
Read the release.
| August 25th Meeting | March 13th Meeting | ||
|---|---|---|---|
| Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable. | Information received since the Federal Open Market Committee met in January suggests that the economy has been expanding moderately. Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated. Household spending and business fixed investment have continued to advance. The housing sector remains depressed. Inflation has been subdued in recent months, although prices of crude oil and gasoline have increased lately. Longer-term inflation expectations have remained stable. | ||
| Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the Committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate. | Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects moderate economic growth over coming quarters and consequently anticipates that the unemployment rate will decline gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook. 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. | ||
| To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent 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. | To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent 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. | ||
| The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee 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. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. | The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee 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. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. | ||