The Federal Open Market Committee left the federal funds target range unchanged at between zero and 0.25% following its policy-setting meeting yesterday. The FOMC reiterated that economic conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period," according to the policy statement.
For the second straight meeting, Federal Reserve Bank of Kansas City president Thomas Hoenig was the lone dissenter.
Hoenig said "that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability," the FOMC statement said.
The panel said the economy "continued to strengthen and that the labor market is stabilizing." Personal spending is increasing moderately, while still "constrained by high unemployment, modest income growth, lower housing wealth, and tight credit."
Inflation, the FOMC said, should remain subdued as substantial slack in resources restrains cost pressures.
