Asia-Pacific

US to continue bond-buying program as scheduled

(Xinhua)
Updated: 2011-04-28 07:28

WASHINGTON - The US economic recovery is "proceeding at a moderate pace," and the Federal Reserve will continue its Treasury bond purchase program by the end of June, said the Fed in a statement released Wednesday.

The overall conditions in the labor market are "improving gradually," the Fed noted in a statement released after the meeting of the Federal Open Market Committee (FOMC), the interest rate policy-making body of the central bank.

Based on information received since the FOMC met in March, the Fed said that US household spending and business investment in equipment and software continue to expand.

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However, "investment in nonresidential structures is still weak, and the housing sector continues to be depressed."

On the closely watched inflation factor, the central bank said that "commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March."

"Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued," said the Fed.

In a unanimous decision, the Fed said it was maintaining the pace of its Treasury bond purchase program launched last November to help the economy grow more strongly and to lower unemployment, which now stands at 8.9 percent.

It "will complete purchases of 600 billion dollars of longer-term Treasury securities by the end of the current quarter," noted the central bank.

It also decided to keep the federal funds rate at the historic low level of zero to 0.25 percent.

The Fed said that it continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate "for an extended period."