The Federal Reserve Open Market Committee on Tuesday concluded its December meeting with near unanimous agreement on continuation of its $600 million government bond buying program and its 0% to 0.25% target for the federal funds rate.
"Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow," said the committee in its statement. "To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the committee decided today to continue expanding its holdings of securities as announced in November."
The lone dissenter was Thomas M. Hoenig, who warned that the policy could create future economic instability and lead to inflation.
"Economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment," said the FOMC in its statement following the meeting. "Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak."
The Fed governors noted that employers remain reluctant to add to payrolls and said "the housing sector continues to be depressed."
"Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward," read the statement.
The Fed will continue buying longer-term Treasurys at a rate of approximately $75 million per month through next year's second quarter.