Pretty much as expected then. Here’s the statement:
Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets havegenerally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks intobetter alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustained economic growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will employ allavailable tools to promote economic recovery and to preserveprice stability. 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 are likely to warrant exceptionally low levels of the federal funds rate for anextended period. As previously announced, to provide support to mortgage lending and housing markets, and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by theend of the year. In addition, the Federal Reserve will buy up to$300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs aswarranted.
Voting for the FOMC monetary policy action were: Ben S.Bernanke, Chairman; William C. Dudley; Elizabeth A. Duke;Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P.Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L.Yellen.
And because it’s always fun to compare and contrast with the previous FOMC statement, made back in April, here’s the link. They look pretty similar, though we note that the paragraph on inflation is the one that seems to have changed the most.
Related links:
Another FOMC day… – The Reformed Broker
Policy on hold as Fed weighs up cycle of easing – FT
Fed faces key decisions on Treasuries and interest rates – FT