InformationInformation received since the Federal Open Market Committee met in SeptemberOctober suggests that economic activity hasand employment have continued to expand at a moderate pace in recent months. Growth in employment has been slow, andmonths, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. HouseholdHousehold spending has advanced a bit more quickly,continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. The housing sectorInflation has shown some further signs of improvement, albeitbeen running somewhat below the Committee's longer-run objective, apart from a depressed level. Inflation recently picked up somewhat, reflecting highertemporary variations that largely reflect fluctuations in energy prices. Longer-termLonger-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. TheThe
Committee remains concerned that, without sufficient policy
accommodation, economic growth might not be strong enough to generate
sustained improvement in labor market conditions. Furthermore,Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. TheThe Committee also anticipates that inflation over the medium term likely wouldwill run at or below its 2 percent objective.
To support a stronger economic recovery and to help ensure that
inflation, over time, is at the rate most consistent with its dual
mandate, the Committee will continue purchasing additional agency
mortgage-backed securities at a pace of $40 billion per month. TheThe Committee also will continue through the end of the yearpurchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities, and itsecurities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee
is maintaining its existing policy of reinvesting principal payments
from its holdings of agency debt and agency mortgage-backed securitiessecurities in agency mortgage-backed securities. These actions, which togethersecurities and, in January, will increase the Committee's holdings of longer-termresume rolling over maturing Treasury securities by about $85 billion each month through the end of the year,at auction. Taken together, these actions should putmaintain
downward pressure on longer-term interest rates, support mortgage
markets, and help to make broader financial conditions more
The Committee will closely monitor incoming information on economic and financial developments in coming months. IfIf the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriateappropriate, until such improvement is achieved in a context of price stability. InIn
determining the size, pace, and composition of its asset purchases, the
Committee will, as always, take appropriate account of the likely
efficacy and costs of such purchases.
To support continued progress toward maximum employment and price
stability, the Committee expects that a highly accommodative stance of
monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. InIn particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low levelsrange for the federal funds rate are likely towill be warrantedappropriate at least through mid-2015.as
long as the unemployment rate remains above 6-1/2 percent, inflation
between one and two years ahead is projected to be no more than a half
percentage point above the Committee's 2 percent longer-run goal, and
longer-term inflation expectations continue to be well anchored. The
Committee views these thresholds as consistent with its earlier
date-based guidance. In determining how long to maintain a highly
accommodative stance of monetary policy, the Committee will also
consider other information, including additional measures of labor
market conditions, indicators of inflation pressures and inflation
expectations, and readings on financial developments. When the Committee
decides to begin to remove policy accommodation, it will take a
balanced approach consistent with its longer-run goals of maximum
employment and inflation of 2 percent.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P.
Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy
C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. VotingVoting against the action was Jeffrey M. Lacker, who opposed additionalthe asset purchasespurchase program and disagreed with the descriptioncharacterization of the time period overconditions under which a highly accommodative stance of monetary policy will remain appropriate andan exceptionally low levelsrange for the federal funds rate are likely towill be warranted.appropriate.
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