WASHINGTON–As expected, the Federal Open Market Committee concluded its March meeting here yesterday by leaving the target range for the federal funds rate unchanged at .75% to 1%.
In its official statement, the FOMC said data indicate that the labor market has continued to strengthen even as growth in economic activity slowed. “Job gains were solid, on average, in recent months, and the unemployment rate declined. Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid,” the Fed said. “Business fixed investment firmed. Inflation measured on a 12-month basis recently has been running close to the Committee's 2% longer-run objective. Excluding energy and food, consumer prices declined in March and inflation continued to run somewhat below 2%. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.”
The Committee said it views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2% over the medium term. Near-term risks to the economic outlook appear roughly balanced,