FOMC SAYS GROWTH IN ECONOMIC ACTIVITY PAUSED IN RECENT MONTHS

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The statement from the FOMC's January policy meeting is out.

It contains no new clues about when the Fed might slow or end quantitative easing.

The statement does say that global market strains eased, but growth in economic activity paused due to weather and other transitory factors in recent months.

Here is the passage addressing quantitative easing:

If the outlook for the labor market does not  improve substantially, the Committee will continue its  purchases of Treasury and agency mortgage-backed  securities, and employ its other policy tools as  appropriate, until such improvement is achieved in a  context of price stability.

In determining the size, pace,  and composition of its asset purchases, the Committee will,  as always, take appropriate account of the likely efficacy  and costs of such purchases.

Below is the full release:

Information received since the Federal Open Market  Committee met in December suggests that growth in economic  activity paused in recent months, in large part because of  weather-related disruptions and other transitory factors.

Employment has continued to expand at a moderate pace but  the unemployment rate remains elevated. Household spending  and business fixed investment advanced, and the housing  sector has shown further improvement. Inflation has been  running somewhat below the Committee’s longer-run  objective, apart from temporary variations that largely  reflect fluctuations in energy prices. Longer-term  inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee  seeks to foster maximum employment and price stability. The  Committee expects that, with appropriate policy  accommodation, economic growth will proceed at a moderate  pace and the unemployment rate will gradually decline  toward levels the Committee judges consistent with its dual  mandate. Although strains in global financial markets have  eased somewhat, the Committee continues to see downside  risks to the economic outlook. The Committee also  anticipates that inflation over the medium term likely will  run at or below its 2 percent objective.

To support a stronger economic recovery and to help  ensure that inflation, over time, is at the rate most  consistent with its dual mandate, the Committee will  continue purchasing additional agency mortgage-backed  securities at a pace of $40 billion per month and longer- term Treasury securities at a pace of $45 billion per  month. The Committee is maintaining its existing policy of  reinvesting principal payments from its holdings of agency  debt and agency mortgage-backed securities in agency  mortgage-backed securities and of rolling over maturing  Treasury securities at auction. Taken together, these  actions should maintain downward pressure on longer-term  interest rates, support mortgage markets, and help to make  broader financial conditions more accommodative.

The Committee will closely monitor incoming  information on economic and financial developments in  coming months. If the outlook for the labor market does not  improve substantially, the Committee will continue its  purchases of Treasury and agency mortgage-backed  securities, and employ its other policy tools as  appropriate, until such improvement is achieved in a  context of price stability. In determining the size, pace,  and composition of its asset purchases, the Committee will,  as always, take appropriate account of the likely efficacy  and costs of such purchases.

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. In particular, the Committee decided to keep  the target range for the federal funds rate at 0 to 1/4  percent and currently anticipates that this exceptionally  low range for the federal funds rate will be appropriate at  least as long as the unemployment rate remains above 6-1/2  percent, inflation between one and two years ahead is  projected to be no more than a half percentage point above  the Committee’s 2 percent longer-run goal, and longer-term  inflation expectations continue to be well anchored. In  determining how long to maintain a highly accommodative  stance of monetary policy, the Committee will also consider  other information, including additional measures of labor  market conditions, indicators of inflation pressures and  inflation expectations, and readings on financial  developments. When the Committee decides to begin to remove  policy accommodation, it will take a balanced approach  consistent with its longer-run goals of maximum employment  and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben  S. Bernanke, Chairman; William C. Dudley, Vice Chairman;  James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome  H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C.  Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting  against the action was Esther L. George, who was concerned  that the continued high level of monetary accommodation  increased the risks of future economic and financial  imbalances and, over time, could cause an increase in long- term inflation expectations.

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