Text: FOMC Monetary Policy Statement for June 22

–April 27 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 April 26-27 meeting follows for comparison:

Information received since the Federal Open Market Committee met in
April indicates that the economic recovery is continuing at a moderate
pace, though somewhat more slowly than the Committee had expected.
Also, recent labor market indicators have been weaker than anticipated.
The slower pace of the recovery reflects in part factors that are likely
to be temporary, including the damping effect of higher food and energy
prices on consumer purchasing power and spending as well as supply chain
disruptions associated with the tragic events in Japan. Household
spending and business investment in equipment and software continue to
expand. However, investment in nonresidential structures is still weak,
and the housing sector continues to be depressed. Inflation has picked
up in recent months, mainly reflecting higher prices for some
commodities and imported goods, as well as the recent supply chain
disruptions. However, longer-term inflation expectations have remained
stable.

Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The unemployment rate
remains elevated; however, the Committee expects the pace of recovery to
pick up over coming quarters and the unemployment rate to resume its
gradual decline toward levels that the Committee judges to be consistent
with its dual mandate. Inflation has moved up recently, but the
Committee anticipates that inflation will subside to levels at or below
those consistent with the Committee’s dual mandate as the effects of
past energy and other commodity price increases dissipate. However, the
Committee will continue to pay close attention to the evolution of
inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that
inflation, over time, is at levels consistent with its mandate, the
Committee decided today to keep the target range for the federal funds
rate at 0 to 1/4 percent. The Committee continues to anticipate 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 for an extended
period. The Committee will complete its purchases of $600 billion of
longer-term Treasury securities by the end of this month and will
maintain its existing policy of reinvesting principal payments from its
securities holdings. The Committee will regularly review the size and
composition of its securities holdings and is prepared to adjust those
holdings as appropriate.

The Committee will monitor the economic outlook and financial
developments and will act as needed to best foster maximum employment
and price stability.

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; and Janet L. Yellen.

*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*

The following is the FOMC statement released April 27, 2011:

Information received since the Federal Open Market Committee met in
March indicates that the economic recovery is proceeding at a moderate
pace and overall conditions in the labor market are improving gradually.
Household spending and business investment in equipment and software
continue to expand. However, investment in nonresidential structures is
still weak, and the housing sector continues to be depressed. Commodity
prices have risen significantly since last summer, and concerns about
global supplies of crude oil have contributed to a further increase in
oil prices since the Committee met in March. Inflation has picked up in
recent months, but longer-term inflation expectations have remained
stable and measures of underlying inflation are still subdued.

Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The unemployment rate
remains elevated, and measures of underlying inflation continue to be
somewhat low, relative to levels that the Committee judges to be
consistent, over the longer run, with its dual mandate. Increases in
the prices of energy and other commodities have pushed up inflation in
recent months. The Committee expects these effects to be transitory,
but it will pay close attention to the evolution of inflation and
inflation expectations. The Committee continues to anticipate a gradual
return to higher levels of resource utilization in a context of price
stability.

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 will complete purchases of $600 billion of
longer-term Treasury securities by the end of the current quarter. The
Committee will regularly review the size and composition of its
securities holdings in light of incoming information and is prepared to
adjust those holdings 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.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MMUFE$,MGU$$$,M$U$$$]