The Federal Open Market Committee held the federal funds rate at a zero to 0.25% range, as economic activity is leveling out, according to the panel’s statement.
“Conditions in financial markets have improved further in recent weeks. Household spending has continued to show signs of stabilizing but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit,” the statement said.
Economic activity is expected to stay weak for a time. The FOMC sees “a gradual resumption of sustainable economic growth in a context of price stability.”
“The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the committee expects that inflation will remain subdued for some time,” the statement said. Inflation is expected to remain low.
The statement said the Federal Reserve will use all tools to promote economic recovery and to preserve price stability.