WASHINGTON - The Federal Open Market Committee Tuesday kept the federal-funds target rate unchanged at zero to 0.25% and reiterated that economic conditions warrant “exceptionally low” interest rates “for an extended period.”
The Fed made no announcement on rates paid on excess reserves and made no statement for renewed Treasury purchases.
However, the committee said it “will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery.”
The Fed also recommitted to its policy of reinvesting principal payments from its securities holdings.
For the sixth straight meeting, Federal Reserve Bank of Kansas City President Thomas Hoenig was the lone dissenter.
Inflation levels are “somewhat below” the Fed’s commitment to maximum employment and price stability, the Fed said. Inflation “is likely to remain subdued for some time before the Committee considers consistent with its mandate,” the Fed said.
The discount rate remained at 0.75%, unchanged since February.
The FOMC last changed the federal funds rate in December 2008, when the rate was dropped to the current zero to 0.25% range. The FOMC last raised rates in June 2006.
