Economic recovery outlook remains slow, Federal Reserve says

ERJ staff report (TB)

Washington DC -- Despite encouraging signs in some sectors, the Federal Reserve expects the rate of economic recovery to remain slow, according to the minutes of the most recent joint meeting of the Board of Governors of the Federal Reserve and the Federal Open Market Committee.

“Most participants anticipated that substantial slack in labor and product markets, along with well-anchored inflation expectations, would keep inflation subdued in the near term,” said the minutes of the Dec. 15-16 meeting issued Jan. 6. Inventory reduction and consumer spending figures seemed promising, as did housing starts, participants agreed. But uncertain job prospects, modest real income growth, tight credit and relatively low wealth levels seemed likely to dampen both consumer confidence and consumer spending in the near future, they said.

At the end of the meeting, the Fed released a statement that it would maintain the target range of the federal funds rate-the core rate of interest the Fed charges to banks-at 1 to ¼ percent.

From Tire Business (A Crain publication)