Federal Reserve policymakers on Wednesday left the federal funds target rate unchanged at zero to 25 basis points.
“The committee … continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period,” said a statement by the Federal Open Market Committee, which sets the rate.
“Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit,” the committee said. “Business spending on equipment and software has risen significantly; however, investment in non-residential structures is declining and employers remain reluctant to add to payrolls.”
“The FOMC modestly upgraded its assessment of the economy but repeated its resolve to keep the monetary pedal to the metal,” Dan Dektar, chief investment officer at Smith Breeden Associates, said in an interview. “Markets had been anticipating possible language on the sale of the more than $1 trillion of assets the Fed has purchased, but there was no hint of any such plan,” Mr. Dektar said.