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| Version 2 | Version 3 |
|---|---|
| Federal Reserve maintains pace of asset purchases | Federal Reserve maintains pace of asset purchases |
| (35 minutes later) | |
| The US Federal Reserve has maintained the rate of its asset purchase programme at $85bn (£54bn) a month, aimed at boosting the economy. | The US Federal Reserve has maintained the rate of its asset purchase programme at $85bn (£54bn) a month, aimed at boosting the economy. |
| It also kept interest rates at a record low range of between zero and 0.25%. | It also kept interest rates at a record low range of between zero and 0.25%. |
| Fed chairman Ben Bernanke said if the central bank's forecasts were correct, it could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014. | |
| But he emphasised that the programme was tied to economic conditions. | But he emphasised that the programme was tied to economic conditions. |
| Mr Bernanke told a press conference that the tapering of the programme was akin to "taking our foot off the gas pedal" and "not about applying the brakes". | Mr Bernanke told a press conference that the tapering of the programme was akin to "taking our foot off the gas pedal" and "not about applying the brakes". |
| He added that interest rates were likely to remain low for some time after asset purchases concluded, and any rate rise was likely to be "far in the future". | |
| The Fed has previously said that it would not consider raising rates until the unemployment rate, currently 7.6%, fell to 6.5%. | |
| But Mr Bernanke stressed that this 6.5% level was "a threshold, not a trigger", saying that if unemployment were to fall below it, it would not immediately lead to a rate rise, but merely a consideration of the broader economic outlook. | |
| Mr Bernanke also noted that inflation had been running below the Fed's 2% longer-run objective, but said that temporary factors were partly the reason for that. | |
| Forecasts | Forecasts |
| In its latest statement, the Fed noted further improvement in labour market conditions in recent months, and said the downside risks to the jobs market and the economy had "diminished since the Fall". | |
| In fresh quarterly projections, the central bank said it expects the US economy to grow between 2.3% and 2.6% in 2013. | |
| It predicts an unemployment rate of about 7.2% to 7.3% by the end of the year, slightly lower than its March prediction. It expects unemployment to have fallen to 5.8% to 6.2% by 2015. | |
| It said inflation could run as low as 0.8% this year, but will pick up next year to between 1.4% and 2%. | |
| "Inflation that is too low is a problem," Mr Bernanke said. "We expect inflation to come back up. That's our forecast. But... we are concerned about it." | |
| "We would like to get inflation up to our target. And that will be a factor in our thinking about the thresholds. It will be a factor in our thinking about asset purchases." | |
| Fourteen of the 19 members of the Fed's policy-setting committee said they did not think it would be appropriate to raise interest rates until 2015, while one member thought a rate rise would not be seen until 2016. | Fourteen of the 19 members of the Fed's policy-setting committee said they did not think it would be appropriate to raise interest rates until 2015, while one member thought a rate rise would not be seen until 2016. |
| Mr Bernanke has been Federal Reserve chairman since 2006 and is expected to step down when his second term ends in January 2014. | Mr Bernanke has been Federal Reserve chairman since 2006 and is expected to step down when his second term ends in January 2014. |
| President Obama has suggested that Mr Bernanke will not continue beyond the end of his term, saying in a recent interview that he had "already stayed a lot longer than he wanted". | President Obama has suggested that Mr Bernanke will not continue beyond the end of his term, saying in a recent interview that he had "already stayed a lot longer than he wanted". |
| At the press conference, Mr Bernanke declined to comment on his personal plans. | At the press conference, Mr Bernanke declined to comment on his personal plans. |