Here's the full text of Wednesday's Fed statement, plus a translation for those who don't speak Fed.
Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable.
Translation: Your lack of a job is a bigger problem than your rising bills.
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 gradually. Consequently, the Committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.
Translation: Our plan will make things better. Or we'll blame Europe.
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.
Translation: Expect $12 in bank interest again this year. And next year. And the one after that.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
Translation: If we can get you a 30-year mortgage at 3.5% fixed, will you buy a house already?
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Now, your 57 words are very well thought out & easily understood!! Maybe Uncle Ben should learn it from you instead of talking jib-blish most of the time!!!
Amazing that every article about the FED brings out the conspiracy kooks. Do you folks who think Bernanke is trying to get Obama re-elected realize that Bernanke and the majority of the FED are republicans and that Bernanke was appointed by republican, as was Greenspan who followed similar policies? Do you folks blame doctors for making patients on chemotherapy ill? Foreign countries prefer Euros for the same reason US companies prefer dollars – convenience! Everyone from ill-informed home buyers to real estate appraisers to bond rating agents to Wall street got us in this mess! Everyone! Take your medicine and quit your second guessing and whining.
What will I do? My Bernanke trousers are near their limit. They are the ones with the fringe on the bottom. That $12 interest isn’t enough to buy a new pair.
Our Country does not look around the world too much. Just take Japan who one time had a real vibrant economy and then it went into the tank. They reduced interest and to date the rates have never increased and neither has their economy. We are doing the same and Bernake is creatng a worthless dollar. Our dollar has no respect. I travel around the world and nations prefer euros to dollars. How do we get rid of the Federal Reserv??
When you are right you are right. Wake America we are unemployed and real estate is not the measuring stick.
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