Highlights from December 2012 Federal Reserve Statement

  • “Although the unemployment rate has declined somewhat since summer, it remains elevated”
  • “Growth in business fixed investment has slowed”
  • Inflation has been running somewhat below the Committee’s longer-run objective”
  • “The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.”
  • “The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month.”
  • “…these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
  • “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.”
  • Statement from prior FOMC Meeting of “exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015” removed.
  • “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.”

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