FOMC statement of November 3, 2010
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 November 3, 2010. Compared with the previous scheduled statement of September 21, 2010: 5 sentences changed, 10 were added, 6 were removed, and 4 stayed the same. In words: 270 added, 210 removed. The vote on this statement: 1 member voted against: Thomas M. Hoenig. On the September 21, 2010 statement: 1 member voted against: Thomas M. Hoenig.
FOMC statement · November 3, 2010
Changed sentences against the previous scheduled statement (September 21, 2010)
4 unchanged · 5 changed · 10 added · 6 removed · words +270 / −210
- September 21, 2010
- 1 member voted against: Thomas M. Hoenig.
- November 3, 2010
- 1 member voted against: Thomas M. Hoenig.
Information received since the Federal Open Market Committee met in August indicates September confirms that the pace of recovery in output and employment has slowed in recent months continues to be slow.
Housing starts are at a continue to be depressed level.
Bank lending has continued to contract, but at a reduced rate in recent months.
The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.
Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
Currently, the unemployment rate is elevated, and measures of underlying inflation are currently at somewhat low, relative to levels somewhat below those that the Committee judges most to be consistent, over the longer run, with its dual mandate to promote maximum employment and price stability.
With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.
The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.
Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities.
The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings.
In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.
The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed will employ its policy tools as necessary to support the economic recovery and to return help ensure that inflation, over time, to is at levels consistent with its mandate.
Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace.
Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth.
In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee's policy objectives.
Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits.
Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.
Statement from Federal Reserve Bank of New York
Show the 4 unchanged sentences
Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.
Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak.
Employers remain reluctant to add to payrolls.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
Source: Board of Governors of the Federal Reserve System — the statement on federalreserve.gov · September 21, 2010
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