WASHINGTON — With the economy “expanding moderately” despite a slowdown of global growth, the Federal Open Market Committee’s projections did not change significantly, according to the minutes of the Committee’s Jan. 24-25 meeting.
As of last month, the committee said it “expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the committee judges to be consistent with its dual mandate.”
Members noted a dip in the December unemployment rate to 8.5 % and activity in the housing market that “improved a bit,” but also pointed out that home prices “continued to trend lower” and that the overall real estate market “remains depressed.”
The committee voted to keep the federal funds target rate at zero to 0.25%, but continued to revise the timetable during which it said it will hold this stance.
“In light of the economic outlook,” the minutes read, “almost all members agreed to indicate that the committee expects to maintain a highly accommodative stance for monetary policy and currently anticipates that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
That’s later than the “mid-2013” language used by the committee in its previous statement.
Voting against the decision was Federal Reserve Bank of Richmond president Jeffrey M. Lacker, who preferred not to include such a timetable in the description.
Lacker “expected that a preemptive tightening of monetary policy would be necessary to prevent an increase in inflation projections or inflation expectations prior to the end of 2014.”
The committee will next meet on March 13.