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Economy in Brief

FOMC Projects Economic Improvement and Moderate Inflation
by Tom Moeller  March 20, 2013

As expected, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent". The Fed funds rate has remained unchanged since late-2008 at its lowest level ever. The discount rate also was left unchanged at 0.75%. The Fed indicated "that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate."

" ... 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." 

Risks to economic growth and inflation were again voiced. "The Committee continues to see downside risks to the economic outlook.  The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective."

Repeating the statement from the last meeting, "The Committee will 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." and it "... 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 press release for today's FOMC meeting can be found here.

Haver's SURVEYS database contains the projections from the Federal Reserve Board. The economic data can be found in Haver's USECON database. 

What You Don't Know Can Hurt You: Keeping Track of Risks in the Financial System from the Federal Reserve Bank of Philadelphia is available here  here.

  Current Last 2012 2011 2010 2009
Federal Funds Rate, % (Target 0.00-0.25 0.00-0.25 0.14 0.10 0.17 0.16
Discount Rate, % 0.75 0.75 0.75 0.75 0.72 0.50
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