Fed suggests economic activity has picked up
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PrintThe Federal Open Market Committee (FOMC) states that the country's economic activity seems to have picked up following what they termed as a "severe downturn." However, they are guarded on many fronts such as business fixed investments and job creation. Businesses are still cutting back and job losses are still ongoing.
Financial markets and housing sector
The committee points out that conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.
Economic activity
Although economic activity is likely to remain weak for a time, the committee anticipates that policy actions taken to date together with financial markets will strengthen economic growth. They state that a gradual return to higher levels of economic activity is in the U.S. economy's near future.
Economic resources underutilized
With substantial resources in many sectors of the economy still underutilized, the committee believes that will dampen cost pressures. As a result, the committee expects that inflation will remain subdued for some time.
The committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates low levels of the federal funds rate for an extended period.
