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"Information received since the Federal Open Market
Committee met in September indicates that economic growth
strengthened somewhat in the third quarter, reflecting in part
a reversal of the temporary factors that had weighed on growth
earlier in the year. Nonetheless, recent indicators point to
continuing weakness in overall labor market conditions, and the
unemployment rate remains elevated. Household spending has
increased at a somewhat faster pace in recent month. Business
investment in equipment and software has continued to expand,
but investment in nonresidential structures is still weak, and
the housing sector remains depressed. Inflation appears to
have moderated since earlier in the year as prices of energy
and some commodities have declined from their peaks.
Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks
to foster maximum employment and price stability. The Committee
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. Moreover, there are significant downside risks to the
economic outlook, including strains in global financial
markets. The Committee also anticipates that inflation will
settle, over coming quarters, at levels at or below those
consistent with the Committee''s dual mandate as the effects of
past energy and other commodity price increases dissipate
further. However, the Committee will continue to pay close
attention to the evolution of inflation and inflation
expectations.
To support a stronger economic recovery and to help ensure
that inflation, over time, is at levels consistent with the
dual mandate, the Committee decided today to continue its
program to extend the average maturity of its holdings of
securities as announced in September. The Committee is
maintaining its existing policies 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.
The Committee will regularly review the size and composition of
its securities holdings and is prepared to adjust those
holdings as appropriate.
The Committee also decided 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 mid-2013.
The Committee will continue to assess the economic outlook
in light of incoming information and is prepared to employ its
tools to promote a stronger economic recovery in a context of
price stability.
Voting for the FOMC monetary policy action were: Ben S.
Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth
A. Duke; Richard W. Fisher, Narayana Kocherlakota, Charles I.
Plosser, Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L.
Yellen. Voting against the action was Charles L. Evans, who
supported additional policy accommodation at this time."
