Text: FOMC Monetary Policy Statement From Dec 13 Meeting

–Nov 2 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 Nov. 1-2 meeting follows for comparison:

Information received since the Federal Open Market Committee met in
November suggests that the economy has been expanding moderately,
notwithstanding some apparent slowing in global growth. While indicators
point to some improvement in overall labor market conditions, the
unemployment rate remains elevated. Household spending has continued to
advance, but business fixed investment appears to be increasing less
rapidly and the housing sector remains depressed. Inflation has
moderated since earlier in the year, and longer-term inflation
expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee continues
to expect a moderate pace of economic growth over coming quarters and
consequently anticipates that the unemployment rate will decline only
gradually toward levels that the Committee judges to be consistent with
its dual mandate. Strains in global financial markets continue to pose
significant downside risks to the economic outlook. The Committee also
anticipates that inflation will settle, over coming quarters, at levels
at or below those consistent with the Committees dual mandate. However,
the Committee will continue to pay close attention to the evolution of
inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that
inflation, over time, is at levels consistent with the dual mandate, the
Committee decided today 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.

The Committee also decided 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
mid-2013.

The Committee will continue to assess the economic outlook in light
of incoming information and is prepared to employ its tools to promote a
stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard
W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom
Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the
action was Charles L. Evans, who supported additional policy
accommodation at this time.

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The following is the FOMC statement released after the meeting
held Nov. 1-2, 2011:

Information received since the Federal Open Market Committee met in
September indicates that economic growth strengthened somewhat in the
third quarter, reflecting in part a reversal of the temporary factors
that had weighed on growth earlier in the year. Nonetheless, recent
indicators point to continuing weakness in overall labor market
conditions, and the unemployment rate remains elevated. Household
spending has increased at a somewhat faster pace in recent months.
Business investment in equipment and software has continued to expand,
but investment in nonresidential structures is still weak, and the
housing sector remains depressed. Inflation appears to have moderated
since earlier in the year as prices of energy and some commodities have
declined from their peaks. Longer-term inflation expectations have
remained stable.

Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee continues
to expect a moderate pace of economic growth over coming quarters and
consequently anticipates that the unemployment rate will decline only
gradually toward levels that the Committee judges to be consistent with
its dual mandate. Moreover, there are significant downside risks to the
economic outlook, including strains in global financial markets. The
Committee also anticipates that inflation will settle, over coming
quarters, at levels at or below those consistent with the Committee’s
dual mandate as the effects of past energy and other commodity price
increases dissipate further. However, the Committee will continue to pay
close attention to the evolution of inflation and inflation
expectations.

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

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