FOMC statement of March 18, 2009
This statement of the Federal Open Market Committee, compared sentence by sentence with the scheduled statement before it: what changed in the text, and how the Committee voted.
In short
The Federal Open Market Committee released this statement on March 18, 2009. Compared with the previous scheduled statement of January 28, 2009: 5 sentences changed, 7 were added, 10 were removed, and 1 stayed the same. In words: 268 added, 329 removed. The vote on this statement: Unanimous. On the January 28, 2009 statement: 1 member voted against: Jeffrey M. Lacker.
FOMC statement · March 18, 2009
Changed sentences against the previous scheduled statement (January 28, 2009)
1 unchanged · 5 changed · 7 added · 10 removed · words +268 / −329
- January 28, 2009
- 1 member voted against: Jeffrey M. Lacker.
- March 18, 2009
- Unanimous.
The Federal Open Market Committee decided today to keep its target range for the federal funds rate at 0 to 1/4 percent.
The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
Information received since the Federal Open Market Committee met in December suggests January indicates that the economy has weakened further continues to contract.
Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending.
Furthermore, global demand appears to be slowing significantly.
Conditions in some financial markets have improved, in part reflecting government efforts to provide liquidity and strengthen financial institutions; nevertheless, credit conditions for households and firms remain extremely tight.
The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant.
Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending.
Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment.
U.S. exports have slumped as a number of major trading partners have also fallen into recession.
Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.
In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable increasing economic slack here and abroad, the Committee expects that inflation pressures will remain subdued in coming quarters.
In these circumstances, the Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth recovery and to preserve price stability.
The focus of the Committee's policy is to support the functioning of financial markets and stimulate the economy through open market operations and other measures that are likely to keep the size of the Federal Reserve's balance sheet at a high level.
The Federal Reserve continues to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand the quantity of such purchases and the duration of the purchase program as conditions warrant.
The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve's balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion.
Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.
The Federal Reserve will be implementing has launched the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses and anticipates that the range of eligible collateral for this facility is likely to be expanded to include other financial assets.
The Committee will continue to carefully monitor carefully the size and composition of the Federal Reserve's balance sheet in light of evolving financial market developments and to assess whether expansions of or modifications to lending facilities would serve to further support credit markets and economic activity and help to preserve price stability developments.
Voting against was Jeffrey M. Lacker, who preferred to expand the monetary base at this time by purchasing U.S. Treasury securities rather than through targeted credit programs.
Show the unchanged sentence
Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
Source: Board of Governors of the Federal Reserve System — the statement on federalreserve.gov · January 28, 2009
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