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. … (T)he pace of economic recovery is likely to be moderate over time,” said a statement by the Federal Open Market Committee, which sets the rate.
“The FOMC downgraded its assessment of economic conditions,” Dan Dektar, chief investment officer at Smith Breeden Associates, said in an interview. “They acknowledged weaker growth, tighter financial conditions and softer inflation. On the margin, the extended period of low rates just got a little longer.”