As expected, the Fed has made a nod to the economic "soft patch"but has given no indication of further stimulus.
On the soft patch: "...the economic recovery is continuing at a moderate pace, though somewhat more slowly then the Committee had expected. Also, recent labor market indicators have been weaker than expected."
Not surprisingly, it says that the slower pace "reflects in part factors that are likely to be temporary," including higher food and energy prices and the Japan quake.
On unemployment: "the Committee expects the pace of recovery to pick up over the coming quarters and the unemployment rate to resume its gradual decline..."
On inflation: increases in energy and other commodity prices are likely to be "transitory."
On interest rates: the Committee repeated that economic conditions "are likely to warrant exceptionally low levels for the federal funds rate for an extended period."
The Committee said it was completing its purchases of Treasury securities and gave no indication of further stimulus. They will continue reinvesting principal payments from its securities holdings.
Bottom line: Fed will not be raising rates any time soon.
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