–April 25 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 April 24-25 meeting follows for comparison:
Information received since the Federal Open Market Committee met in
April suggests that the economy has been expanding moderately this year.
However, growth in employment has slowed in recent months, and the
unemployment rate remains elevated. Business fixed investment has
continued to advance. Household spending appears to be rising at a
somewhat slower pace than earlier in the year. Despite some signs of
improvement, the housing sector remains depressed. Inflation has
declined, mainly reflecting lower prices of crude oil and gasoline, 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 expects
economic growth to remain moderate over coming quarters and then to pick
up very gradually. Consequently, the Committee anticipates that the
unemployment rate will decline only slowly toward levels that it judges
to be consistent with its dual mandate. Furthermore, strains in global
financial markets continue to pose significant downside risks to the
economic outlook. The Committee anticipates that inflation over the
medium term will run at or below the rate that it judges most consistent
with its dual mandate.
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 expects to maintain a highly accommodative stance
for monetary policy. In particular, the Committee decided today 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 late 2014.
The Committee also decided to continue through the end of the year
its program to extend the average maturity of its holdings of
securities. Specifically, the Committee intends to purchase Treasury
securities with remaining maturities of 6 years to 30 years at the
current pace and to sell or redeem an equal amount of Treasury
securities with remaining maturities of approximately 3 years or less.
This continuation of the maturity extension program should put downward
pressure on longer-term interest rates and help to make broader
financial conditions more accommodative. The Committee is maintaining
its existing policy of reinvesting principal payments from its holdings
of agency debt and agency mortgage-backed securities in agency
mortgage-backed securities. The Committee is prepared to take further
action as appropriate to promote a stronger economic recovery and
sustained improvement in labor market conditions 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; Dennis P.
Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy
C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.
Voting against the action was Jeffrey M. Lacker, who opposed
continuation of the maturity extension program.
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The following is the FOMC statement released after the meeting
held April 24-25, 2012:
Information received since the Federal Open Market Committee met in
March suggests that the economy has been expanding moderately. Labor
market conditions have improved in recent months; the unemployment rate
has declined but remains elevated. Household spending and business fixed
investment have continued to advance. Despite some signs of improvement,
the housing sector remains depressed. Inflation has picked up somewhat,
mainly reflecting higher prices of crude oil and gasoline. However,
longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The Committee expects
economic growth to remain moderate over coming quarters and then to pick
up gradually. Consequently, the Committee anticipates that the
unemployment rate will decline gradually toward levels that it judges to
be consistent with its dual mandate. Strains in global financial markets
continue to pose significant downside risks to the economic outlook. The
increase in oil and gasoline prices earlier this year is expected to
affect inflation only temporarily, and the Committee anticipates that
subsequently inflation will run at or below the rate that it judges most
consistent with its dual mandate.
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 expects to maintain a highly accommodative stance
for monetary policy. In particular, the Committee decided today 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 late 2014.
The Committee also decided 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 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; Dennis P.
Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John
C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey
M. Lacker, who does not anticipate that economic conditions are likely
to warrant exceptionally low levels of the federal funds rate through
late 2014.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MMUFE$,MGU$$$,M$U$$$]