The Federal Reserve in an announcement Wednesday said it would continue its multibillion-dollar stimulative policies, signaling that it is unhappy with the pace of economic growth in the United States.
The statement said the Fed would continue to purchase $85 billion worth of bonds and keep interest rates artificially depressed, adding that it would “await more evidence that progress will be sustained before adjusting the pace of its purchases.”
The goal has been to lower the unemployment rate to at least 6.5 percent, meaning this type of billion-dollar spending may go on for a very, very long time.
“Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated,” the statement reads.
The Fed criticized Washington gridlock for hindering economic growth but the statement made no mention of the recent 16-day partial government shutdown.
“Fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable,” the statement reads.
The Fed did, however, mention its concerns over higher mortgage rates.
The decision was approved by a 9-1 vote with the president of the Kansas City Federal Reserve Bank, Esther George, dissenting (something she has done at every single meeting this year), the Associated Press notes.
“[T]hese actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate,” the Fed said in its statement.
Oddly enough, U.S. stocks, which normally respond to this news with jubilation, fell after the announcement was made:
You can read the full statement here:
Follow Becket Adams (@BecketAdams) on Twitter