THE FEDERAL Reserve said yesterday that it stood ready to provide additional support to bolster a modest economic recovery, suggesting it may be preparing to do more to keep unemployment from rising and prices from falling.
The US central bank made no shift in monetary policy at the end of a one-day meeting, although it expressed somewhat greater concern about the sluggish pace of economic growth and uncomfortably low inflation than it had when it last met in August.
“The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Reserve said in a statement.
Kansas City Federal Reserve Bank president Thomas Hoenig dissented for a sixth consecutive time.
After cutting the overnight federal funds rate to near zero in December 2008, the Fed launched an asset-buying programme in a further effort to lower borrowing costs and help the economy.
In the end, it bought $1.7 trillion in longer-term US government debt and mortgage-related bonds.
The Fed’s easy-money policies and the prospect of further easing have driven up the value of currencies in other countries, including Japan and Brazil, as investors moved out of the dollar in search of higher returns. – (Reuters)
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