Despite “unsatisfactory” movement toward maximum employment and price stability, the Federal Open Market Committee agreed to keep the target range for the federal funds rate at 0.00% to 0.25% and to leave unchanged the level of its holdings of Treasury, agency debt, and mortgage-backed securities, according to the minutes of the Sept. 21 meeting released Tuesday.
The FOMC determined that the recovery continues slowly and, while the data was mixed, it seemed to be strengthening later in the month.
With some uncertainty about the economy, the Fed policymaking board decided to gather more information before changing policy.
“Members wanted to consider further the most effective framework for calibrating and communicating any additional steps to provide such stimulus,” the minutes said.
“Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the committee’s mandate, they would consider it appropriate to take action soon.”
Nearly all members agreed that the FOMC statement should reiterate the expectation that economic conditions were likely to warrant exceptionally low levels of the federal funds rate for an extended period.
However, Federal Reserve Bank of Kansas City president Thomas Hoenig reiterated his opposition, saying that retaining the current statement would create conditions that could lead to macroeconomic and financial imbalances.