WASHINGTON – The economic recovery “is on a firmer footing” and the Federal Reserve held its benchmark interest rate between zero and 0.25% and did not change its $600 billion Treasury purchase program, the Federal Open Market Committee announced Tuesday.
Energy and commodity prices “are currently putting upward pressure on inflation,” the committee said in a statement. The effects of increased prices are expected to be “transitory,” and long-term inflation expectations “have remained stable,” the Fed said.
The unemployment rate “remains elevated” but the labor market appears “to be improving gradually,” the Fed said.
The Fed’s $600 billion of Treasury purchases was reaffirmed through June. The FOMC will continue to review the overall size of the program as needed.
The voting decision was unanimous.
At the last FOMC meeting in January, members “expressed greater confidence” of a sustained economic recovery, strengthening gradually in the “coming quarters” based on economic indicators and business contacts.
Treasuries were stronger before the FOMC announcement, primarily due to uncertainty in Japan. The 10-year Treasury note was quoted at 3.29% earlier in the day and dipped as low as 3.20%, according to Thomson Reuters.
