By US Daily Review Staff.
Rep. Kevin Brady (R-TX), Vice Chairman of the Joint Economic Committee and senior member of the House Ways and Means Committee, was quick to comment on today’s Federal Open Market Committee policy statement.
“The FOMC pronouncement that the economy remains weak and that ‘growth in employment has slowed in recent months’ is just one more confirmation of the failure of President Obama’s economic policies. Those policies and other Administration proposals continue to place a drag on the economy and hold back the recovery. It’s time to change direction and place our faith in the American people and the free enterprise system to create jobs and opportunity for all Americans.”
“The FOMC’s decision to extend ‘Operation Twist’ is disappointing in light of Chairman Bernanke’s recent testimony to the Joint Economic Committee in which he told the committee that ‘monetary policy is not a panacea’ and that there are limits to what the Federal Reserve can do.”
“I wish the FOMC had looked the President and Congress in the eye and said, ‘do your job, remove the uncertainty surrounding tax policy and put your fiscal house in order.’ More monetary morphine is not the answer to what ails our economy.”
Here is the Fed’s statement in its entirety:
The following is a reformatted version of the full text of the statement released today by theFederal Reserve in Washington:
Information received since the Federal Open Market Committee met in April suggests that the economy has been expanding moderately this year. However, growth in employment has slowed in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending appears to be rising at a somewhat slower pace than earlier in the year. Despite some signs of improvement, the housing sector remains depressed. Inflation has declined, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that theunemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchaseTreasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed continuation of the maturity extension program.