WASHINGTON — As the economy showed signs of moderate growth, the Federal Open Market Committee kept the federal funds rate target at zero to 0.25%, and kept forward guidance expecting the rate to stay in that range through mid-2013.
Noting some improvement in overall labor market conditions, FOMC members remained concerned that the unemployment rate remains elevated and that the housing sector remains depressed.
The FOMC said it seeks to foster maximum employment and price stability. It anticipates inflation will settle over the coming quarters, but said it will continue to pay close attention to the evolution of inflation and inflation expectations.
The committee voted to continue extending the average maturity of its holdings of securities and to maintain its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities into agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.
The committee will regularly review the size and composition of its securities holdings as is prepared to adjust those holdings as appropriate.
The committee also decided to keep the target range for the federal funds rate at zero to 0.25% and anticipates that economic conditions are likely to warrant exceptionally low levels for the rate at least through mid-2013.
The only dissenter was Federal Reserve Bank of Chicago president Charles L. Evans, who supported “additional policy accommodation at this time.”
