WASHINGTON, June 22 (KUNA) -- The Federal Reserve affirmed here Wednesday that the U.S. economic recovery is "continuing at a moderate pace, though somewhat more slowly".
The Federal Open Market Committee said in a statement that since it met in April "the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected".
The Committee added that also recent labor market indicators have been "weaker than anticipated." "The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan," according t the Committee.
It added that "inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions," but that "longer-term inflation expectations have remained stable".
"The Committee will continue to pay close attention to the evolution of inflation and inflation expectations," the statement noted.
Furthermore, the Committee has decided to keep the target range for the federal funds rate at zero to 0.25 percent "to promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate".
It indicated that it will "complete its purchases of USD 600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings".
The Committee affirmed that it will "regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate".
"The Committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability," the statement concluded. (end) si.gb KUNA 222116 Jun 11NNNN