–FOMC’s March 16 Statement Follows for Comparison
WASHINGTON (MNI) – The following is the text of the statement
released Wednesday by the Federal Open Market Committee after its
two-day monetary policy meeting. The statement from the one-day March 16
meeting follows for comparison:
Information received since the Federal Open Market Committee met in
March suggests that economic activity has continued to strengthen and
that the labor market is beginning to improve. Growth in household
spending has picked up recently but remains constrained by high
unemployment, modest income growth, lower housing wealth, and tight
credit. Business spending on equipment and software has risen
significantly; however, investment in nonresidential structures is
declining and employers remain reluctant to add to payrolls. Housing
starts have edged up but remain at a depressed level. While bank lending
continues to contract, financial market conditions remain supportive of
economic growth. Although the pace of economic recovery is likely to be
moderate for a time, the Committee anticipates a gradual return to
higher levels of resource utilization in a context of price stability.
With substantial resource slack continuing to restrain cost
pressures and longer-term inflation expectations stable, inflation is
likely to be subdued for some time.
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 of 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 promote economic recovery and price stability.
In light of improved functioning of financial markets, the Federal
Reserve has closed all but one of the special liquidity facilities that
it created to support markets during the crisis. The only remaining such
program, the Term Asset-Backed Securities Loan Facility, is scheduled to
close on June 30 for loans backed by new-issue commercial
mortgage-backed securities; it closed on March 31 for loans backed by
all other types of collateral.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A.
Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K.
Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas
M. Hoenig, who believed that continuing to express the expectation of
exceptionally low levels of the federal funds rate for an extended
period was no longer warranted because it could lead to a build-up of
future imbalances and increase risks to longer run macroeconomic and
financial stability, while limiting the Committees flexibility to begin
raising rates modestly.
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The following is the FOMC statement released March 16, 2010:
Information received since the Federal Open Market Committee met in
January suggests that economic activity has continued to strengthen and
that the labor market is stabilizing. Household spending is expanding at
a moderate rate but remains constrained by high unemployment, modest
income growth, lower housing wealth, and tight credit. Business spending
on equipment and software has risen significantly. However, investment
in nonresidential structures is declining, housing starts have been flat
at a depressed level, and employers remain reluctant to add to payrolls.
While bank lending continues to contract, financial market conditions
remain supportive of economic growth. Although the pace of economic
recovery is likely to be moderate for a time, the Committee anticipates
a gradual return to higher levels of resource utilization in a context
of price stability.
With substantial resource slack continuing to restrain cost
pressures and longer-term inflation expectations stable, inflation is
likely to be subdued for some time.
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 of the federal funds rate for an
extended period. To provide support to mortgage lending and housing
markets and to improve overall conditions in private credit markets, the
Federal Reserve has been purchasing $1.25 trillion of agency
mortgage-backed securities and about $175 billion of agency debt; those
purchases are nearing completion, and the remaining transactions will be
executed by the end of this month. The Committee will continue to
monitor the economic outlook and financial developments and will employ
its policy tools as necessary to promote economic recovery and price
stability.
In light of improved functioning of financial markets, the Federal
Reserve has been closing the special liquidity facilities that it
created to support markets during the crisis. The only remaining such
program, the Term Asset-Backed Securities Loan Facility, is scheduled to
close on June 30 for loans backed by new-issue commercial
mortgage-backed securities and on March 31 for loans backed by all other
types of collateral.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A.
Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K.
Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas
M. Hoenig, who believed that continuing to express the expectation of
exceptionally low levels of the federal funds rate for an extended
period was no longer warranted because it could lead to the buildup of
financial imbalances and increase risks to longer-run macroeconomic and
financial stability.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MMUFE$,MGU$$$,M$U$$$]
