FOMC statement of September 21, 2011
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 September 21, 2011. Compared with the previous scheduled statement of August 9, 2011: 9 sentences changed, 7 were added, 4 were removed, and 7 stayed the same. In words: 285 added, 216 removed. The vote on this statement: 3 members voted against: Richard W. Fisher, Narayana Kocherlakota, Charles I. Plosser. On the August 9, 2011 statement: 3 members voted against: Richard W. Fisher, Narayana Kocherlakota, Charles I. Plosser.
FOMC statement · September 21, 2011
Changed sentences against the previous scheduled statement (August 9, 2011)
7 unchanged · 9 changed · 7 added · 4 removed · words +285 / −216
- August 9, 2011
- 3 members voted against: Richard W. Fisher, Narayana Kocherlakota, Charles I. Plosser.
- September 21, 2011
- 3 members voted against: Richard W. Fisher, Narayana Kocherlakota, Charles I. Plosser.
Information received since the Federal Open Market Committee met in June August indicates that economic growth so far this year has been considerably slower than the Committee had expected remains slow.
Recent indicators suggest a deterioration point to continuing weakness in overall labor market conditions in recent months, and the unemployment rate has moved up remains elevated.
Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased.
Household spending has flattened out, Investment in nonresidential structures is still weak, and the housing sector remains depressed.
Temporary factors, 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, appear to account for only some of the recent weakness in economic activity.
Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions.
More recently, Inflation has appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their earlier peaks.
The Committee now expects a somewhat slower continues to expect some pickup in the pace of recovery over coming quarters than it did at the time of the previous meeting and but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.
Moreover, there are significant downside risks to the economic outlook have increased, including strains in global financial markets.
To promote the ongoing support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with its the dual mandate, the Committee decided today to keep extend the target range for the federal funds rate at 0 to 1/4 percent average maturity of its holdings of securities.
The Committee 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 mid-2013.
The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.
The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.
This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative.
To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.
In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
The Committee also decided 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 mid-2013.
It will continue to assess the economic outlook in light of incoming information and is prepared to employ these its tools as appropriate.
Voting against the action were : Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period did not support additional policy accommodation at this time.
Maturity Extension Program and Reinvestment Policy Frequently Asked Questions: Maturity Extension Program and Reinvestment Policy Current FAQs September 21, 2011 What is the Federal Reserve's maturity extension program (referred to by some as "operation twist") and what is its purpose?
Show the 7 unchanged sentences
However, business investment in equipment and software continues to expand.
Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further.
However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.
Source: Board of Governors of the Federal Reserve System — the statement on federalreserve.gov · August 9, 2011
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