MercoPress. South Atlantic News Agency

Federal Funds rates remain at 1%

The Unites States Federal Open Market Committee decided Tuesday December 9 to keep its target for the federal funds rate at 1 percent arguing that “with inflation quite low and resource use slack, the Committee believes that policy accommodation can be maintained for a considerable period”. According to the official FOMC release:

"The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the inter-meeting period confirms that output is expanding briskly, and the labour market appears to be improving modestly. Increases in core consumer prices are muted and expected to remain low".

"The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. However, with inflation quite low and resource use slack, the Committee believes that policy accommodation can be maintained for a considerable period".

Voting for the FOMC monetary policy action were, Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; and Robert T. Parry.

US Federal fund rates are at their lowest in 45 years. The FOMC meeting is scheduled for January 28/29.