The Federal Reserve on Tuesday said it’s willing to ease monetary policy further to spur growth and support prices while refraining from expanding its holdings of securities.
The Federal Open Market Committee announced it will maintain the federal funds target rate at zero to 0.25%, repeating its past statements that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate for an extended period.”
“The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Open Market Committee said in a statement in Washington.
Policymakers said the pace of recovery and job growth have “slowed in recent months.” The committee also said “measures of underlying inflation are currently at levels somewhat below those the committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.”
The dollar fell and stocks rose on speculation Chairman Ben Bernanke will purchase additional U.S. government securities in coming months in an effort to lower long-term interest rates. The FOMC retained its stance from last month of keeping its portfolio stable at around $2 trillion to keep money from draining out of the financial system.