WASHINGTON — The Federal Open Market Committee announced Wednesday that it 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.
The panel said the economy is expanding moderately and that labor conditions have improved but the unemployment rate, while declining somewhat, remains elevated.
FOMC members said inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations remain stable.
The panel expects the jobless rate to decline only gradually toward levels that the committee deems to be consistent with its dual mandate. The committee noted that strains in global financial markets continue to pose significant downside risks to the economic outlook.
The only dissenter was Federal Reserve Bank of Richmond President Jeffrey Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.