FOMC statement of December 12, 2012
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 December 12, 2012. Compared with the previous scheduled statement of October 24, 2012: 9 sentences changed, 7 were added, 3 were removed, and 7 stayed the same. In words: 267 added, 129 removed. The vote on this statement: 1 member voted against: Jeffrey M. Lacker. On the October 24, 2012 statement: 1 member voted against: Jeffrey M. Lacker.
FOMC statement · December 12, 2012
Changed sentences against the previous scheduled statement (October 24, 2012)
7 unchanged · 9 changed · 7 added · 3 removed · words +267 / −129
- October 24, 2012
- 1 member voted against: Jeffrey M. Lacker.
- December 12, 2012
- 1 member voted against: Jeffrey M. Lacker.
Information received since the Federal Open Market Committee met in September October suggests that economic activity has and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions.
Growth in employment has been slow, and the unemployment rate remains elevated.
Although the unemployment rate has declined somewhat since the summer, it remains elevated.
Household spending has advanced a bit more quickly continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed.
The housing sector has shown some further signs of improvement, albeit from a depressed level.
Inflation recently picked up somewhat, reflecting higher energy prices.
Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices.
The Committee also anticipates that inflation over the medium term likely would will run at or below its 2 percent objective.
The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month.
The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction.
Taken together, these actions , which together will increase the Committee's holdings of longer-term securities by about $85 billion each month through the end of the year, should put maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability.
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.
In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low levels range for the federal funds rate are likely will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be warranted at least through mid-2015 no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.
The Committee views these thresholds as consistent with its earlier date-based guidance.
In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.
Voting against the action was Jeffrey M. Lacker, who opposed additional the asset purchases purchase program and disagreed with the description characterization of the time period over conditions under which a highly accommodative stance of monetary policy will remain appropriate and an exceptionally low levels range for the federal funds rate are likely to will be warranted appropriate.
Statement Regarding Purchases of Treasury Securities and Agency Mortgage-Backed Securities
Show the 7 unchanged sentences
Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.
The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.
Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.
The Committee will closely monitor incoming information on economic and financial developments in coming months.
In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.
Source: Board of Governors of the Federal Reserve System — the statement on federalreserve.gov · October 24, 2012
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