–Sept. 13 Statement Follows for Comparison
WASHINGTON (MNI) – The following is the text of the Federal Open
Market Committee’s monetary policy statement released Wednesday. The
statement released after the September 12-13 meeting follows for
comparison:
Information received since the Federal Open Market Committee met in
September suggests that economic activity has continued to expand at a
moderate pace in recent months. Growth in employment has been slow, and
the unemployment rate remains elevated. Household spending has advanced
a bit more quickly, but growth in business fixed investment has slowed.
The housing sector has shown some further signs of improvement, albeit
from a depressed level. Inflation recently picked up somewhat,
reflecting higher energy prices. Longer-term inflation expectations
have remained stable.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee remains
concerned that, without sufficient policy accommodation, economic growth
might not be strong enough to generate sustained improvement in labor
market conditions. Furthermore, strains in global financial markets
continue to pose significant downside risks to the economic outlook.
The Committee also anticipates that inflation over the medium term
likely would run at or below its 2 percent objective.
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 will continue purchasing additional agency
mortgage-backed securities at a pace of $40 billion per month. The
Committee also will continue through the end of the year its program to
extend the average maturity of its holdings of Treasury securities, and
it is maintaining its existing policy of reinvesting principal payments
from its holdings of agency debt and agency mortgage-backed securities
in agency mortgage-backed securities. These actions, which together
will increase the Committees holdings of longer-term securities by
about $85 billion each month through the end of the year, should put
downward pressure on longer-term interest rates, support mortgage
markets, and help to make broader financial conditions more
accommodative.
The Committee will closely monitor incoming information on economic
and financial developments in coming months. If the outlook for the
labor market does not improve substantially, the Committee will continue
its purchases of agency mortgage-backed securities, undertake additional
asset purchases, and employ its other policy tools as appropriate until
such improvement is achieved in a context of price stability. In
determining the size, pace, and composition of its asset purchases, the
Committee will, as always, take appropriate account of the likely
efficacy and costs of such purchases.
To support continued progress toward maximum employment and price
stability, the Committee expects that a highly accommodative stance of
monetary policy will remain appropriate for a considerable time after
the economic recovery strengthens. In particular, the Committee also
decided today to keep the target range for the federal funds rate at 0
to 1/4 percent and currently anticipates that exceptionally low levels
for the federal funds rate are likely to be warranted at least through
mid-2015.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P.
Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy
C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.
Voting against the action was Jeffrey M. Lacker, who opposed additional
asset purchases and disagreed with the description of the time period
over which a highly accommodative stance of monetary policy will remain
appropriate and exceptionally low levels for the federal funds rate are
likely to be warranted.
*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*
The following is the FOMC statement released after the meeting held
September 12-13, 2012:
Information received since the Federal Open Market Committee met in
August suggests that economic activity has continued to expand at a
moderate pace in recent months. Growth in employment has been slow, and
the unemployment rate remains elevated. Household spending has continued
to advance, but growth in business fixed investment appears to have
slowed. The housing sector has shown some further signs of improvement,
albeit from a depressed level. Inflation has been subdued, although the
prices of some key commodities have increased recently. Longer-term
inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee is
concerned that, without further policy accommodation, economic growth
might not be strong enough to generate sustained improvement in labor
market conditions. Furthermore, strains in global financial markets
continue to pose significant downside risks to the economic outlook. The
Committee also anticipates that inflation over the medium term likely
would run at or below its 2 percent objective.
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 agreed today to increase policy accommodation by
purchasing additional agency mortgage-backed securities at a pace of $40
billion per month. The Committee also will continue through the end of
the year its program to extend the average maturity of its holdings of
securities as announced in June, and it is maintaining its existing
policy of reinvesting principal payments from its holdings of agency
debt and agency mortgage-backed securities in agency mortgage-backed
securities. These actions, which together will increase the Committees
holdings of longer-term securities by about $85 billion each month
through the end of the year, should put downward pressure on longer-term
interest rates, support mortgage markets, and help to make broader
financial conditions more accommodative.
The Committee will closely monitor incoming information on economic
and financial developments in coming months. If the outlook for the
labor market does not improve substantially, the Committee will continue
its purchases of agency mortgage-backed securities, undertake additional
asset purchases, and employ its other policy tools as appropriate until
such improvement is achieved in a context of price stability. In
determining the size, pace, and composition of its asset purchases, the
Committee will, as always, take appropriate account of the likely
efficacy and costs of such purchases.
To support continued progress toward maximum employment and price
stability, the Committee expects that a highly accommodative stance of
monetary policy will remain appropriate for a considerable time after
the economic recovery strengthens. In particular, the Committee also
decided today to keep the target range for the federal funds rate at 0
to 1/4 percent and currently anticipates that exceptionally low levels
for the federal funds rate are likely to be warranted at least through
mid-2015.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P.
Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy
C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.
Voting against the action was Jeffrey M. Lacker, who opposed additional
asset purchases and preferred to omit the description of the time period
over which exceptionally low levels for the federal funds rate are
likely to be warranted.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MMUFE$,MGU$$$,M$U$$$]
