The U.S. Federal Open Market Committee has decided to keep its target range for the federal funds rate at 0 to 0.25%, the FOMC said Wednesday.
In its accompanying statement, the committee said it “continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”
“In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters,” the FOMC said.
“Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”
With the Fed unable to lower rates further and the U.S. economy in need of more stimulus, officials appear poised to purchase longer-maturity Treasury securities as a way to keep interest rates low.
The FOMC “is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets” the FOMC said.
Fed stands pat on U.S. interest rates
FOMC prepared to purchase longer-term Treasury securities to keep rates low
- By: IE Staff
- January 28, 2009 January 28, 2009
- 14:27