–Dec 14 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 from the Dec. 14 meeting follows for comparison:
Information received since the Federal Open Market Committee met in
December confirms that the economic recovery is continuing, though at a
rate that has been insufficient to bring about a significant improvement
in labor market conditions. Growth in household spending picked up late
last year, but remains constrained by high unemployment, modest income
growth, lower housing wealth, and tight credit. Business spending on
equipment and software is rising, while investment in nonresidential
structures is still weak. Employers remain reluctant to add to payrolls.
The housing sector continues to be depressed. Although commodity prices
have risen, longer-term inflation expectations have remained stable, and
measures of underlying inflation have been trending downward.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. Currently, the
unemployment rate is elevated, and measures of underlying inflation are
somewhat low, relative to levels that the Committee judges to be
consistent, over the longer run, with its dual mandate. Although the
Committee anticipates a gradual return to higher levels of resource
utilization in a context of price stability, progress toward its
objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure
that inflation, over time, is at levels consistent with its mandate, the
Committee decided today to continue expanding its holdings of securities
as announced in November. In particular, the Committee is maintaining
its existing policy of reinvesting principal payments from its
securities holdings and intends to purchase $600 billion of longer-term
Treasury securities by the end of the second quarter of 2011. The
Committee will regularly review the pace of its securities purchases and
the overall size of the asset-purchase program in light of incoming
information and will adjust the program as needed to best foster maximum
employment and price stability.
The Committee will maintain the target range for the federal funds
rate at 0 to 1/4 percent and continues to anticipate that economic
conditions, including low rates of resource utilization, subdued
inflation trends, and stable inflation expectations, are likely to
warrant exceptionally low levels for the federal funds rate for an
extended period.
The Committee will continue to monitor the economic outlook and
financial developments and will employ its policy tools as necessary to
support the economic recovery and to help ensure that inflation, over
time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles
L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser;
Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L.
Yellen.
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The following is the FOMC statement released Dec. 14, 2010:
Information received since the Federal Open Market Committee met in
November confirms that the economic recovery is continuing, though at a
rate that has been insufficient to bring down unemployment. Household
spending is increasing at a moderate pace, but remains constrained by
high unemployment, modest income growth, lower housing wealth, and tight
credit. Business spending on equipment and software is rising, though
less rapidly than earlier in the year, while investment in
nonresidential structures continues to be weak. Employers remain
reluctant to add to payrolls. The housing sector continues to be
depressed. Longer-term inflation expectations have remained stable, but
measures of underlying inflation have continued to trend downward.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. Currently, the
unemployment rate is elevated, and measures of underlying inflation are
somewhat low, relative to levels that the Committee judges to be
consistent, over the longer run, with its dual mandate. Although the
Committee anticipates a gradual return to higher levels of resource
utilization in a context of price stability, progress toward its
objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure
that inflation, over time, is at levels consistent with its mandate, the
Committee decided today to continue expanding its holdings of securities
as announced in November. The Committee will maintain its existing
policy of reinvesting principal payments from its securities holdings.
In addition, the Committee intends to purchase $600 billion of
longer-term Treasury securities by the end of the second quarter of
2011, a pace of about $75 billion per month. The Committee will
regularly review the pace of its securities purchases and the overall
size of the asset-purchase program in light of incoming information and
will adjust the program as needed to best foster maximum employment and
price stability.
The Committee will maintain the target range for the federal funds
rate at 0 to 1/4 percent and continues to anticipate that economic
conditions, including low rates of resource utilization, subdued
inflation trends, and stable inflation expectations, are likely to
warrant exceptionally low levels for the federal funds rate for an
extended period.
The Committee will continue to monitor the economic outlook and
financial developments and will employ its policy tools as necessary to
support the economic recovery and to help ensure that inflation, over
time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A.
Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K.
Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Voting against the policy was Thomas M. Hoenig. In light of the
improving economy, Mr. Hoenig was concerned that a continued high level
of monetary accommodation would increase the risks of future economic
and financial imbalances and, over time, would cause an increase in
long-term inflation expectations that could destabilize the economy.
** Market News International Washington Bureau: 202-371-2121 **
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