WASHINGTON — The Federal Open Market Committee kept the federal funds rate target at zero to 0.25%, saying it anticipates economic conditions to warrant exceptionally low levels for the rate at least through late 2014.
They noted a significant improvement in the unemployment rate, though it remains high, and advances in household spending and business fixed investment. FOMC members said inflation has been subdued in recent months, but noted that the prices of crude oil and gasoline have increased.
The panel expects the jobless rate to decline only gradually toward levels that it deems to be consistent with the Fed’s dual mandate.
The committee noted that strains in global financial markets have eased, but continue to pose significant downside risks to the economic outlook.
The only dissenter was Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low federal funds rate levels.