As predicted, the Federal Reserve's Federal Open Market Committee (FOMC) today left the target range for the federal funds rate at 0-0.25%.
"The Committee...continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period," said the FOMC in a statement. "Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time."
Nine of the 10 FOMC members voted in favor of maintaining the current rate. The lone dissenting vote was cast by Thomas Hoenig, who believes that the low rate is no longer necessary and could "lead to a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability."
Other remaining risks cited by the FOMC were weak investment in nonresidential structures, depressed housing starts and contracting bank lending in recent months.
A full copy of the FOMC statement can be found here.
Jacob Barron, NACM staff writer