FOMC Meeting: Rates Stay Unchanged but “Downside Risks” Remain

The Federal Open Market Committee voted today to keep the target interest rate unchanged at a range of zero to 0.25 percent, but raised their assessment of the economy while saying "downside risks" remain.

In regard to the state of the economy, the Fed noted, "economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of temporary factors that had weighed on growth earlier in the year." Weakness continues in the overall labor market and the unemployment rate remains elevated, however household spending "has increased at somewhat faster pace in recent months."

The Fed will "continue its program to extend the average maturity of its holdings of securities as announced in September." The Committee will continue its policy to reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency MBS. The size and composition of its securities' holdings is subject to "regular review" and adjustments will be made if appropriate.

The Fed refrained from taking additional steps to ease monetary policy to the opposition of the Chicago Governor, Charles L. Evans. Mr. Evans supported additional accommodation at this time.