Differences Between Past and Current FOMC Statements
Release Date: June 19,July 31, 2013
For immediate release
Information received since the Federal Open Market Committee met in MayJune suggests that economic activity has been expandingexpanded at a moderate pace.modest pace during the first half of the year.
Labor market conditions have shown further improvement in recent
months, on balance, but the unemployment rate remains elevated.
Household spending and business fixed investment advanced, and the
housing sector has strengthened further,been strengthening, but mortgage rates have risen somewhat and
fiscal policy is restraining economic growth. Partly reflecting
transitory influences, inflation has been running below the Committee's
longer-run objective, but 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 that, with
appropriate policy accommodation, economic growth will proceed at a moderatepick up from its recent
pace and the unemployment rate will gradually decline toward levels the
Committee judges consistent with its dual mandate. The Committee sees
the downside risks to the outlook for the economy and the labor market
as having diminished since the fall. The Committee also anticipatesrecognizes that inflation over the medium term likely will run at orpersistently below its 2 percent objective.objective
could pose risks to economic performance, but it anticipates that
inflation will move back toward its objective over the medium term.
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 decided to continue purchasing additional agency
mortgage-backed securities at a pace of $40 billion per month and
longer-term Treasury securities at a pace of $45 billion per month. The
Committee is maintaining its existing policy 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. Taken together, these actions
should maintain downward pressure on longer-term interest rates, support
mortgage markets, and help to make broader financial conditions more
accommodative.
The Committee will closely monitor incoming information on economic and
financial developments in coming months. The Committee will continue its
purchases of Treasury and agency mortgage-backed securities, and employ
its other policy tools as appropriate, until the outlook for the labor
market has improved substantially in a context of price stability. The
Committee is prepared to increase or reduce the pace of its purchases to
maintain appropriate policy accommodation as the outlook for the labor
market or inflation changes. In determining the size, pace, and
composition of its asset purchases, the Committee will continue to take
appropriate account of the likely efficacy and costs of such purchases
as well as the extent of progress toward its economic objectives.
To support continued progress toward maximum employment and price stability, the Committee expectstoday reaffirmed its view
that a highly accommodative stance of monetary policy will remain
appropriate for a considerable time after the asset purchase program
ends and the economic recovery strengthens. In particular, the Committee
decided to keep the target range for the federal funds rate at 0 to 1/4
percent and currently anticipates that this exceptionally low range for
the federal funds rate will be appropriate at least as long as the
unemployment rate remains above 6-1/2 percent, inflation between one and
two years ahead is projected to be no more than a half percentage point
above the Committee's 2 percent longer-run goal, and longer-term
inflation expectations continue to be well anchored. In determining how
long to maintain a highly accommodative stance of monetary policy, the
Committee will also consider other information, including additional
measures of labor market conditions, indicators of inflation pressures
and inflation expectations, and readings on financial developments. When
the Committee decides to begin to remove policy accommodation, it will
take a balanced approach consistent with its longer-run goals of maximum
employment and inflation of 2 percent.