US Economic Recovery Proceeding Moderately, Says Federal Reserve


U.S. economic recovery is proceeding at a “moderate pace” and overall conditions in the labor market are “improving gradually,” the Federal Reserve reported Wednesday.

The Federal Open Market Committee said in a statement that commodity prices have risen “significantly” since last summer, and “concerns about global supplies of crude oil have contributed to a further increase in oil prices,” since the Committee’s last meeting in March.

It indicated that “inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.”

It added that “unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low,” where also increases in the prices of energy and other commodities “have pushed up inflation in recent months.”

The Committee expects these effects to be “transitory,” and that it will pay “close attention to the evolution of inflation and inflation expectations.”

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided “to continue expanding its holdings of securities” as announced in November.

In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of USD 600 billion of longer-term Treasury securities by the end of the current quarter.

The Committee “will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.

“The Committee will also maintain the target range for the federal funds rate at 0 to 0.25 percent.”

It “continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.”

According to the statement, the Committee “will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.”


KUNA is the Kuwait News Agency

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