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Jan. 28 Text

The Federal Open Market Committee decidedtoday to keep its target range for the federalfunds rate at 0 to 1/4 percent. The Committeecontinues to anticipate that economicconditions are likely to warrant exceptionallylow levels of the federal funds rate for sometime.Information received since the Committeemet in December suggests that the economy hasweakened further. Industrial production,housing starts, and employment have continuedto decline steeply, as consumers andbusinesses have cut back spending.Furthermore, global demand appears to beslowing significantly. Conditions in somefinancial markets have improved, in partreflecting government efforts to provideliquidity and strengthen financialinstitutions; nevertheless, credit conditionsfor households and firms remain extremelytight. The Committee anticipates that agradual recovery in economic activity willbegin later this year, but the downside risksto that outlook are significant.In light of the declines in the prices ofenergy and other commodities in recent monthsand the prospects for considerable economicslack, the Committee expects that inflationpressures will remain subdued in comingquarters. Moreover, the Committee sees somerisk that inflation could persist for a timebelow rates that best foster economic growthand price stability in the longer term.The Federal Reserve will employ allavailable tools to promote the resumption ofsustainable economic growth and to preserveprice stability. The focus of the Committee'spolicy is to support the functioning offinancial markets and stimulate the economythrough open market operations and othermeasures that are likely to keep the size ofthe Federal Reserve's balance sheet at a highlevel. The Federal Reserve continues topurchase large quantities of agency debt andmortgage-backed securities to provide supportto the mortgage and housing markets, and itstands ready to expand the quantity of suchpurchases and the duration of the purchaseprogram as conditions warrant. The Committeealso is prepared to purchase longer-termTreasury securities if evolving circumstancesindicate that such transactions would beparticularly effective in improving conditionsin private credit markets. The Federal Reservewill be implementing the Term Asset-BackedSecurities Loan Facility to facilitate theextension of credit to households and smallbusinesses. The Committee will continue tomonitor carefully the size and composition ofthe Federal Reserve's balance sheet in lightof evolving financial market developments andto assess whether expansions of ormodifications to lending facilities wouldserve to further support credit markets andeconomic activity and help to preserve pricestability.

Dec. 16 Text

The Federal Open Market Committeedecided today to establish a targetrange for the federal funds rate of 0to 1/4 percent.Since the Committee's last meeting,labor market conditions havedeteriorated, and the available dataindicate that consumer spending,business investment, and industrialproduction have declined. Financialmarkets remain quite strained andcredit conditions tight. Overall, theoutlook for economic activity hasweakened further.Meanwhile, inflationary pressures havediminished appreciably. In light ofthe declines in the prices of energyand other commodities and the weakerprospects for economic activity, theCommittee expects inflation tomoderate further in coming quarters.The Federal Reserve will employ allavailable tools to promote theresumption of sustainable economicgrowth and to preserve pricestability. In particular, theCommittee anticipates that weakeconomic conditions are likely towarrant exceptionally low levels ofthe federal funds rate for some time.The focus of the Committee's policygoing forward will be to support thefunctioning of financial markets andstimulate the economy through openmarket operations and other measuresthat sustain the size of the FederalReserve's balance sheet at a highlevel. As previously announced, overthe next few quarters, the FederalReserve will purchase large quantitiesof agency debt and mortgage-backedsecurities to provide support to themortgage and housing markets, and itstands ready to expand its purchasesof agency debt and mortgage-backedsecurities as conditions warrant. TheCommittee is also evaluating thepotential benefits of purchasinglonger-term Treasury securities. Earlynext year, the Federal Reserve willalso implement the Term Asset-backedSecurities Loan Facility to facilitatethe extension of credit to householdsand small businesses. The FederalReserve will continue to consider waysof using its balance sheet to furthersupport credit markets and economicactivity.

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