June 19, 2013
Fed sticks to stimulus plan, says economy a bit firmer
The Federal Reserve on Wednesday stuck to its plan to keep stimulating US growth until the job market improves even as it acknowledged some parts of the economy were looking a bit better.
In a statement after a two-day meeting, the central bank repeated its vow to keep rates near zero until mid-2015 and its pledge to keep supporting growth while the recovery strengthens.
The Fed's policy-setting panel made no change in its plan to purchase $40 billion in mortgage-backed debt per month to push interest rates lower and spur a stronger recovery.
"The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Fed said.
US stocks edged lower after the announcement and the dollar extended gains against the euro, while Treasury bonds showed little reaction, closing the session lower.
The central bank's statement differed little from its announcement last month in which it launched its third round of bond-buying, or quantitative easing, known as QE3, and made clear officials still had concerns on the recovery's strength.
US gross domestic product grew at an annual rate of just 1.3 percent in the second quarter. Economists expect the pace of recovery quickened a bit in the third quarter but not by enough to put steady downward pressure on the jobless rate, which fell sharply in September but remains at an elevated 7.8 percent.