United States: Fed maintains current stance in line with expectations
November 2, 2011
At its latest policy meeting on 1-2 November, the Federal Open Market Committee (FOMC) left the federal funds within the historically-low range of 0% to 0.25% set in December 2008. The Committee also voted to continue with the average maturity extension programme of its holding of securities, commonly referred to as Operation Twist. Both decisions were widely anticipated by the market. The Fed recognized that growth in the third quarter seemed to have strengthened, although the FOMC ?continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually?. Against this backdrop, the Fed maintained that ?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 mid-2013.?