Wednesday April 29, 07:35 PM
Fed says economic slump seems to be easing
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WASHINGTON (AFP) - The Federal Reserve said Wednesday the US economy is still contracting but at a "somewhat slower" pace as it maintained its base interest rate at a range of zero to 0.25 percent.
Concluding a two-day meeting, the Federal Open Market Committee maintained its aggressive policy of low rates accompanied by a variety of programs to pump up credit and lift the economy out of recession.
The FOMC statement said that since its last meeting in March, "the economy has continued to contract, though the pace of contraction appears to be somewhat slower."
It added that Fed members "anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability."
The panel headed by Fed chairman Ben Bernanke repeated its position that it "will employ all available tools to promote economic recovery and to preserve price stability."
It voted unanimously to maintain the target range for the federal funds rate at zero to 0.25 percent and added that "that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
It said the central bank would carry out its vast program to purchase Treasury debt and other securities "in light of the evolving economic outlook and conditions in financial markets."
The Fed had previously announced plans to buy up to 1.25 trillion of agency mortgage-backed securities and up to 200 billion dollars of government agency debt by the end of the year.
In addition, the Fed plans to buy up to 300 billion dollars of Treasury securities by autumn, as part of its plan to bring down interest rates it cannot directly control.
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