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January 28, 2015US MONETARY POLICY The Federal Open Market Committee (FOMC) issued its latest monetary policy statement today.
The FOMC announced that it would maintain the target range for the federal funds rate at 0 to 1/4 percent and continue reinvesting principal payments from its holdings of mortgage-backed securities and rolling over maturing Treasury securities and thus holdings of longer-term securities will continue to be at sizable level. The current assessment is that Committee can be patient in beginning normalize the stance of monetary policy, monitoring labour market conditions, inflation pressures and expexctations, and readings on fianancial and international developments.
The FOMC says that economy is expanding at a moderate pace with labour market indicators showing strong job gains and a lower unemployment rate, and that the underutilization of labour resources continues to diminish. Household spending is rising moderately with low energy prices boosting household purchasing power. Inflation continues to be below the long-run objective, partly reflecting energy prices, with longer-term inflation expectations remaining stable.
US Federal Reserve