Differences Between Past and Current FOMC Statements
Release Date: September 18,October 30, 2013
For immediate release
Information received since the Federal Open Market Committee met in JulySeptember generally
suggests that economic activity has been expandingcontinued to expand at a moderate pace. Some indicatorsIndicators
of labor market conditions have shown some
further improvement in recent months,improvement, but the unemployment rate remains
elevated. HouseholdAvailable
data suggest that household spending and business fixed investment
advanced, andwhile
the recovery in the housing sector has
been strengthening, but mortgage rates have risen further and fiscalslowed somewhat in recent months. Fiscal policy
is restraining economic growth. Apart from fluctuations due to changes in
energy prices, 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 pick 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, on net,
since last fall, but the tightening of financial
conditions observed in recent months, if sustained, could slow the pace of
improvement in the economy and labor market.fall.
The Committee recognizes that inflation persistently below its 2 percent
objective could pose risks to economic performance, but it anticipates that
inflation will move back toward its objective over the medium term.
Taking into account the extent of federal fiscal retrenchment,retrenchment over the past year, the Committee
sees the improvement in economic activity and labor market conditions since it
began its asset purchase program a year ago
as consistent with growing underlying strength in the broader economy. However,
the Committee decided to await more evidence that progress will be sustained
before adjusting the pace of its purchases. Accordingly, 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, which in turn should promote a stronger economic recovery and
help to ensure that inflation, over time, is at the rate most consistent with
the Committee's dual mandate.
The Committee will closely monitor incoming information on economic and
financial developments in coming months and 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. In judging when to moderate the
pace of asset purchases, the Committee will, at its coming meetings, assess
whether incoming information continues to support the Committee's expectation
of ongoing improvement in labor market conditions and inflation moving back
toward its longer-run objective. Asset purchases are not on a preset course,
and the Committee's decisions about their pace will remain contingent on the
Committee's economic outlook as well as its assessment of the likely efficacy
and costs of such purchases.
To support continued progress toward maximum employment and price stability,
the Committee today 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.