Fed Keeps Rates Steady; Says Will Stay Low for 'Considerable Period'
The Federal Reserve voted unanimously Tuesday to keep the benchmark U.S. interest rate at a 45-year low of 1%, and said it could keep it at that level for a "considerable period."
"The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation," the Fed said in its statement.
"However, with inflation quite low and resource use slack, the committee believes that policy accommodation can be maintained for a considerable period."
The overnight bank lending rate, also known as the federal funds rate, is the interest banks charge each other on overnight loans and the Fed's main lever for influencing the economy.
Low rates can spur consumer and capital spending, which can help the economy and the trucking industry.
The Fed also said that business output is "expanding briskly" and the labor market was "improving modestly."
The Fed last reduced the federal funds rate on June 25, the 13th rate cut since January 2001. Transport Topics
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Statement by the Federal Reserve
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period confirms that output is expanding briskly, and the labor market appears to be improving modestly. Increases in core consumer prices are muted and expected to remain low.
The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. However, with inflation quite low and resource use slack, the Committee believes that policy accommodation can be maintained for a considerable period.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; and Robert T. Parry.
