Following the two-day Federal Open Market Committee meeting, the US Federal Reserve issued a statement hinting that interest rates would remain low for some time.
The FOMC said it will be appropriate to maintain the current target range for the federal funds rate for “a considerable time after the asset purchase program ends” and added that it “does not reflect the considerable economic progress that has been made toward the Committee’s goals”.
The Committee stated that since it had met in July, economic activity had expanded at a “moderate pace”, while labour market conditions had improved further.
It added: “Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow.
“Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective.”
The Federal Reserve’s asset buying program is due to come to an end in October when it will begin purchasing additional mortgage-backed securities at a pace of $5bn a month and longer term Treasury securities at a pace of $10bn per month...
