The U.S. Federal Open Market Committee (FOMC) said at the conclusion of its policy-setting meeting the U.S. economy has been "expanding moderately," but global economic concerns loom. As expected, the Fed left its target for the federal funds rate at 0 to 0.25% and said it will continue its program to extend the average maturity of its holdings of securities as announced in September.
"While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable," states the FOMC.
It also said it continues to expect a moderate pace of economic growth over coming quarters and "consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate." Additionally, it added, "Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations."