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FOMC STATEMENTS: SIDE-BY-SIDE

Jan. 28 Text Dec. 16 Text


The Federal Open Market Committee decided
today to keep its target range for the federal
The Federal Open Market Committee
funds rate at 0 to 1/4 percent. The Committee decided today to establish a target
continues to anticipate that economic range for the federal funds rate of 0
conditions are likely to warrant exceptionally to 1/4 percent.
low levels of the federal funds rate for some
time.
Since the Committee's last meeting,
Information received since the Committee labor market conditions have
met in December suggests that the economy has deteriorated, and the available data
weakened further. Industrial production, indicate that consumer spending,
housing starts, and employment have continued
to decline steeply, as consumers and
business investment, and industrial
businesses have cut back spending. production have declined. Financial
Furthermore, global demand appears to be markets remain quite strained and
slowing significantly. Conditions in some credit conditions tight. Overall, the
financial markets have improved, in part outlook for economic activity has
reflecting government efforts to provide
liquidity and strengthen financial weakened further.
institutions; nevertheless, credit conditions
for households and firms remain extremely Meanwhile, inflationary pressures have
tight. The Committee anticipates that a diminished appreciably. In light of
gradual recovery in economic activity will
begin later this year, but the downside risks
the declines in the prices of energy
to that outlook are significant. and other commodities and the weaker
prospects for economic activity, the
In light of the declines in the prices of Committee expects inflation to
energy and other commodities in recent months moderate further in coming quarters.
and the prospects for considerable economic
slack, the Committee expects that inflation
pressures will remain subdued in coming The Federal Reserve will employ all
quarters. Moreover, the Committee sees some available tools to promote the
risk that inflation could persist for a time resumption of sustainable economic
below rates that best foster economic growth
and price stability in the longer term.
growth and to preserve price
stability. In particular, the
The Federal Reserve will employ all Committee anticipates that weak
available tools to promote the resumption of economic conditions are likely to
sustainable economic growth and to preserve warrant exceptionally low levels of
price stability. The focus of the Committee's
policy is to support the functioning of the federal funds rate for some time.
financial markets and stimulate the economy
through open market operations and other The focus of the Committee's policy
measures that are likely to keep the size of going forward will be to support the
the Federal Reserve's balance sheet at a high
level. The Federal Reserve continues to
functioning of financial markets and
purchase large quantities of agency debt and stimulate the economy through open
mortgage-backed securities to provide support market operations and other measures
to the mortgage and housing markets, and it that sustain the size of the Federal
stands ready to expand the quantity of such Reserve's balance sheet at a high
purchases and the duration of the purchase
program as conditions warrant. The Committee level. As previously announced, over
also is prepared to purchase longer-term the next few quarters, the Federal
Treasury securities if evolving circumstances Reserve will purchase large quantities
indicate that such transactions would be of agency debt and mortgage-backed
particularly effective in improving conditions
in private credit markets. The Federal Reserve
securities to provide support to the
will be implementing the Term Asset-Backed mortgage and housing markets, and it
Securities Loan Facility to facilitate the stands ready to expand its purchases
extension of credit to households and small of agency debt and mortgage-backed
businesses. The Committee will continue to securities as conditions warrant. The
monitor carefully the size and composition of
the Federal Reserve's balance sheet in light Committee is also evaluating the
of evolving financial market developments and potential benefits of purchasing
to assess whether expansions of or longer-term Treasury securities. Early
modifications to lending facilities would next year, the Federal Reserve will
serve to further support credit markets and
economic activity and help to preserve price
also implement the Term Asset-backed
stability. Securities Loan Facility to facilitate
the extension of credit to households
and small businesses. The Federal
Reserve will continue to consider ways
of using its balance sheet to further
support credit markets and economic
activity.