It also pinned a quickening of inflation largely on temporary factors, including higher commodity prices and supply chain disruptions from Japan's earthquake.
The central bank said the forces pushing up prices should dissipate, allowing inflation to subside to levels consistent with price stability, even as growth revives.
"The slower pace of recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply-chain disruptions associated with the tragic events in Japan," the Fed said in a statement at the conclusion of a two-day meeting.
As widely expected, the Fed said it will maintain interest rates at exceptionally low levels for an extended period. It also confirmed it was ending its $600-billion bond-buying programme at the end of the month, while reiterating that it will continue to reinvest principal payments from its holdings.(japan earthquake 2011, japan tsunami, japan, japon )
The Fed downgraded its view of the labour market, saying it had been "weaker than anticipated". That contrasted with the statement after its last meeting in April when it said the job market was "improving gradually".
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