In its press release, the FOMC noted that since December’s meeting, economic growth is ongoing, but at a pace deemed “insufficient” to make a material impact on the jobs market. In addition, the Fed said household spending “picked up” late last year, although it continues to be held back by joblessness, tight credit and lower housing wealth.
This is similar to the language used in the FOMC’s November and December 2010 statements.
Also like its last two statements, the Fed used this month’s press release to re-affirm its plan to keep the Fed Funds Rate near zero percent “for an extended period”, and to keep its $600 billion bond market support package in place.
And finally, of particular interest to home buyers and mortgage rate shoppers, for the second straight month, the Federal Open Market Committee’s statement contained an entire paragraph detailing the Federal Reserve’s dual mandate of managing inflation levels, while fostering maximum employment.
The Fed acknowledges progress toward this goal, but calls that progress “disappointingly slow”. Inflation is too low right now, and joblessness too high.
Over time, the Fed expects both measurements to improve.
Mortgage market reaction to the FOMC has been positive since the statement’s release. Mortgage rates are unchanged, but poised to improve.
The FOMC’s next scheduled meeting is a 1-day event, March 15, 2011.