By www.CentralBankNews.info The Federal Reserve held the target for its benchmark federal funds rate unchanged at 0-0.25 percent and maintained its monthly purchases of $85 billion of mortgage-backed securities and longer-term Treasury bonds, saying the expansion in U.S. economic activity had paused in recent months, mainly due to weather-related disruptions and other temporary factors.
The Federal Reserves’s monetary policy committee, the Federal Open Market Committee (FOMC), also said it would continue to purchase Treasuries and housing market securities until the labor market shows substantial improvement, repeating its statement from December.
As in December, the Federal Reserve said it expects to maintain its “exceptionally low range for the federal funds rate” at least as long as the unemployment rate remains above 6.5 percent and inflation two years ahead is forecast at a maximum of 2.5 percent, half a percentage point over the Federal Reserve’s 2.0 percent target.
“To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens,” the FOMC said in statement after a two-day meeting.
