The Federal Open Market Committee (FOMC) has concluded its policy-setting meeting, saying since it met in March, the economy has expanded "moderately" and "inflation has picked up somewhat." However, it says it expects long-term inflation expectations to remain stable.
"Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed," it adds.
Additionally, the FOMC says it expects economic growth to remain "moderate" over coming quarters and then to pick up gradually. "Consequently, the committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate," it adds. "Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate."
As expected, the FOMC says it will keep the target range for the federal funds rate at 0 to 1/4 percent "and currently anticipates that economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."