A comparison of the Federal Reserve’s statement on the economy and its policy positions from its last meeting on Jan. 26-27 and the meeting Tuesday.
LABOR MARKETS
January: “The deterioration in the labor market is abating.”
March: “The labor market is stabilizing.”
ECONOMIC CONDITIONS
January: “Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth and tight credit.”
March: “Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit.”
BUSINESS ACTIVITY
January: “Business spending on equipment and software appears to be picking up.”
March: “Business spending on equipment and software has risen significantly.”
HOUSING
January: Dropped a reference that had been in the December statement that housing was showing some signs of improvement.
March: “Housing starts have been flat at a depressed level.”
INFLATION
January: “Inflation is likely to be subdued for some time.”
March: “Inflation is likely to be subdued for some time.”
INTEREST RATES
January: Leaves federal funds rate at record low of zero to 0.25 percent, where it has been since December 2008, and repeats pledge to keep rates “exceptionally low” for “an extended period.”
January: Leaves federal funds rate unchanged and repeats pledge to keep rates “exceptionally low” for “an extended period.”
DISSENT
January: Kansas City Federal Reserve Bank President Thomas Hoenig dissents, arguing that the pledge to keep rates at exceptionally low levels for an extended period is no longer warranted.
March: Hoenig again is the only Fed official to dissent. The statement expands on the reasons for his dissent by saying Hoenig is concerned that exceptionally low interest rates “could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.”
SPECIAL SUPPORT
January: The Fed said it would close on Feb. 1 various special programs to support the financial market “in light of improved functioning of financial markets.”
March: The Fed says that the only remaining special credit program, the Term Asset-Backed Securities Loan Facility, was still scheduled to close by March 31 for loans backed by various types of collateral and would close on June 30 for loans backed by new-issue commercial mortgage-backed securities.
MORTGAGE SUPPORT
January: The Fed repeated language that it is on track to buy $1.25 trillion in mortgage backed securities from Fannie Mae and Freddie Mac by March 31.
March: Repeats its intent to wrap up this program, designed to boost the housing market by keeping mortgage rates low, by March 31.
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