What did the Fed decide on January 31, 2013? Fed commentary.

The Federal Open Market Committee of the U.S. Federal Reserve commented on its decision in maintaining the benchmark interest rate in the target range of 1.25% -1.50% and the current situation in the country.

Fed noted a significant increase in the economic activity a sustained improvement in the labor market situation due to the steady growth in jobs and the continuous low unemployment.

The Fed states that during the period between the commission meetings, family expenses and investment investments of business structures have increased significantly.

The Fed continues to assess long-term inflation expectations as stable. At the same time, the total inflation and basic inflation calculated on a 12-month basis, not taking into account energy and food prices, remain below two percent. The same impact on inflation compensatory from the markets in recent months has increased but continues to be implemented to a small extent.

According to the officials, the Fed seeks to promote maximum employment and price stability. The Fed still expects that further gradual regulation of monetary policy will contribute to the expansion of economic activity at a moderate pace and maintain a strong labor market. Annual inflation is expected to rise this year, which is expected to stabilize near the Fed's designated 2% target in the medium term. Short-term risks for the economic outlook look fairly balanced, but the Fed will continue to closely monitor inflation.

Taking into account the levels that were already achieved and expected parameters of the labor market and inflation. The Federal Reserve decided to keep the target interest rate range for federal funds at 1.25% -1.50%. The basic principles of monetary policy will remain flexible enough, thereby supporting the strengthening of the labor market and the steady return of inflation to a level of 2%.

In determining the timing and scope of future regulation of the target interest rate range for federal funds, the Fed will be guided by both achieved and expected progress in moving towards long-term goals of maximum employment and inflation at two percent. his approach will be based on a wide range of information, including parameters of labor market conditions, indicators of inflationary pressures and inflation expectations, as well as, financial and international events. The Fed will closely monitor the actual and expected inflation in processes relative to its symmetric target inflation rate. The Fed expects that economic conditions will evolve in a way that will ensure a further smooth progress in the interest rate for federal funds. It will likely remain for some time below the levels that are expected to prevail in the long term. However, the actual interest rate trajectory for federal funds will depend on economic trends in accordance with the incoming data.

The current fundamentals of monetary policy were adopted unanimously by 9 members of the Federal Open Market Committee of the U.S. Federal Reserve.