Fed Continues Stimulus and Says Recovery on ‘Firmer Footing’
The New York Times - The Federal Reserve said Tuesday that it would continue to stimulate the economy despite signs of stronger growth because it remained more concerned about persistent unemployment than the potential for increased inflation.
The central bank also affirmed its plans to purchase $600 billion in Treasury securities by the end of June and said that it would maintain its extraordinary two-year-old policy of holding its benchmark interest rate near zero “for an extended period.”
The unanimous decision by the Fed’s steering committee to leave its major policies unchanged was widely expected. But the committee did offer a more optimistic assessment of the economy than in its statement in January. Tuesday’s statement, however, made no mention of the crisis in Japan, which has led to a widespread selloff of stocks.
“The economic recovery is on a firmer footing, and overall conditions in the labor market appear to improving gradually,” the Fed said in a statement released Tuesday after the latest meeting of the policymakers.
Businesses and consumers are spending more money, the statement said. And the central bank said that inflation over the longer term was likely to stay low and steady.
The central bank has struggled to explain why it is not worried about inflation at a time when consumers are paying more to fill their cars and stomachs.
Click to read more: http://www.nytimes.com/2011/03/16/business/economy/16fed.html?_r=2&ref=business