The U.S. economy has been expanding at a moderate pace and labor markets have shown improvements in recent months, the Federal Reserve said in a statement Wednesday.
But unemployment remains stubbornly high, the statement adds.
The latest Fed announcement made it clear that there will be no reduction in its $85 billion per month bond purchases. The bond-buying will continue until the employment situation improves.
Still, the somewhat rosier outlook may signal that the Fed is at least considering “tapering” its purchases.
“In the statement, the Fed says the economy is growing moderately. And for the first time it said the “downside risks to the outlook” had diminished since fall,” the Associated Press notes.
“The fundamentals look better to us,” Fed Chairman Ben Bernanke said in a press conference Wednesday afternoon, “especially in housing.”
The Fed in its statement estimates that U.S. unemployment will hit 6.5 percent in 2014, much lower than earlier estimates claimed. But until that happens, it appears the Fed is committed to keeping long-term interest rates at record lows with its bond purchases.
The Fed also plan to keep short-term interest rates low.
“The statement was approved on a 10-2 vote. James Bullard, the president of the Federal Reserve Bank of St. Louis, objected for the first time this year, saying he wanted a stronger commitment from the Fed to keep inflation from falling too low,” the AP reports.
“Esther George objected for the fourth time this year, again voicing concerns about inflation rising too quickly,” the report adds.
Here’s the full press release:
And here’s how U.S. stocks are reacting:
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Featured image Getty Images. This post has been updated.
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