The Federal Reserve today kept its federal funds target rate unchanged at a range of zero to 0.25% and said it expects economic conditions to warrant keeping the rate at exceptionally low levels for an extended period.
Although economic activity is likely to remain weak for a time, the (Federal Open Market) 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 sustainable economic growth in a context of price stability, according to a Fed statement at the close of the committees two-day meeting.
The prices of energy and other commodities have risen of late, the statement said. However, substantial resource slack is likely to dampen cost pressures, and the committee expects that inflation will remain subdued for some time.
Theres really nothing new here, Dan Dektar, executive vice president and CEO at Smith Breeden Associates, said of the statement. The market was looking for additional guidance on the duration of low-interest rates and the securities-purchase programs, but the Fed offered no further guidance.