The U.S. Federal Reserve announced Tuesday that it was prepared to take further moves to jump-start the sagging U.S. economy if needed.
"The incoming data indicated that output and employment were increasing only slowly and at rates well below those recorded earlier in the year," the Fed said in a statement after policymaking panel meeting.
Although the possibility of U.S. economy sliding back to a recession is small, the "U.S. output growth, and the associated progress in reducing the level of unemployment, could be slow for some time," the Federal Open Market Committee (FOMC), the interest rate policy making body of the U.S. central bank, said in the September meeting minutes released Tuesday.
The Fed also decided to maintain the target range for the federal funds rate at historic low level of zero to 0.25 percent to bolster the economic recovery.
"The information reviewed at the September 21 meeting indicated that the pace of the economic expansion slowed in recent months and that inflation remained low. Private businesses increased employment modestly in August, but the length of the workweek was unchanged and the unemployment rate remained elevated," noted the minutes.
The Fed pointed out that the rise in business outlays for equipment and software moderated recently following outsized gains in the first half of the year. Housing activity weakened further, with nonresidential construction remaining depressed.
"The labor market situation continued to improve only slowly. The average monthly increase in private payroll employment over the three months ending in August was small and was less than the average gain earlier in the year," said the U.S. central bank.
The Fed contended that consumer confidence remained downbeat in August and early September, with households more pessimistic about the outlook for their personal financial situations and general economic conditions.
In the economic forecast prepared for the September FOMC meeting, the staff lowered its projection for the increase in real economic activity over the second half of 2010. The staff also reduced slightly its forecast of growth next year but continued to anticipate a moderate strengthening of the expansion in 2011 as well as a further pickup in economic growth in 2012, noted the Fed.
"Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the Committee’s mandate, they would consider it appropriate to take action soon," according to the minutes.
The Fed said that the committee was prepared to provide additional accommodation if needed to prop up the economic recovery and to return inflation over time to levels consistent with its mandate.
The Fed officials agreed to maintain the total face value of domestic securities held in its System Open Market Account at approximately 2 trillion U.S. dollars, by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.
VietNamNet/Xinhuanet
