Federal Reserve policymakers on Tuesday left the target range for the federal funds rate unchanged at zero to 0.25%, according to a Fed statement.
In addition, the Fed announced that it will continue with the plan announced last month of buying an additional $600 billion of longer-term Treasury securities by June 30, 2011, at a pace of about $75 billion a month.
“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 for the federal funds rate for an extended period,” said a statement by the Federal Open Market Committee, which sets the rate.
“Although the committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow,” the statement added.
“There was really no significant change,” said Matthew Smith, president and chief investment officer of fixed-income manager Smith Affiliated Capital.
“Consumers are spending a bit better, and core inflation continues to be low going forward,” Mr. Smith continued. “It’s positive for the market because short-term interest rates will continue to be low.”