As predicted, the Federal Reserve's Federal Open Market Committee (FOMC) today left the target range for the federal funds rate at 0-0.25%.
"The Committee...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," said the FOMC in a statement. "Nonetheless, the
Committee anticipates a gradual return to higher levels of resource
utilization in a context of price stability, although the pace of
economic recovery is likely to be moderate for a time."
of the 10 FOMC members voted in favor of maintaining the current rate.
The lone dissenting vote was cast by Thomas Hoenig, who believes that
the low rate is no longer necessary and could "lead to a build-up of
future imbalances and increase risks to longer-run macroeconomic and
Other remaining risks cited by the FOMC were
weak investment in nonresidential structures, depressed housing starts
and contracting bank lending in recent months.
A full copy of the FOMC statement can be found here.
Jacob Barron, NACM staff writer