MercoPress. South Atlantic News Agency

Federal Reserve leaves rate unchanged at 1%

The Federal Reserve Open Market Committee unanimously decided Wednesday January 28 to keep its target for the federal funds rate at 1%, the lowest since 1958

In its official release the Federal Reserve states that "with inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation", underlining that "the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal".

Following is the official 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. Although new hiring remains subdued, other indicators suggest an improvement in the labour market. 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. With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation".

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.

US interest rates have remained unchanged since June 2003 when they were cut a quarter per cent.