Differences Between Current and Previous FOMC Statements

Information received since the Federal Open Market Committee met in MarchApril suggests that the economy has been expanding moderately. Labor market conditions have improvedmoderately this year. However, growth in employment has slowedin recent months;months, and the unemployment rate has declined but remains elevated. Household spending and businessBusiness fixed investment havehas continued to advance. Household spending appears to be rising at a somewhat slower pace than earlier in the year. Despite some signs of improvement, the housing sector remains depressed. Inflation haspicked up somewhat,declined, mainly reflecting higherlower prices of crude oil and gasoline. However,gasoline, and 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 economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline graduallyonly slowly toward levels that it judges to be consistent with its dual mandate. StrainsFurthermore, 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 over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

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 expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to 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.

The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings ofsecurities. Specifically, the Committee intends to purchase Treasury securities as announced in September.with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policiespolicy 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.securities.The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdingstake further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.