The assessment of the economic outlook was once again somber with output and employment gains described as "slow." The statement pointed to underlying inflation having trended lower and currently at levels that are "somewhat low, relative to levels that the Committee judges to be consistent, over the longer term, with its dual mandate." The other part of its mandate, that there is maximum employment in the economy, was also deemed to be falling short, and progress toward achieving its objectives has been "disappointingly slow." The Fed continues to anticipate "a gradual return to higher levels of resource utilization." 

Fed President Hoeing dissented against today's decision and said that he believes the risks associated with making additional purchases of U.S. Treasury securities outweigh the benefits. He maintained his stance that the maintenance of very easy policy is increasing the risks of future imbalances that may undermine the economy and fuel higher, long-term, inflation expectations.

The Fed put its commitment to "provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate" into play today with the announcement of additional Treasury bond purchases. Today's statement also provides policymakers with the flexibility to increase the program or to discontinue it, depending on the how inflation and the labour market perform. 

Information contained in this report has been prepared by the Economics Department of RBC Financial Group based on information obtained from sources considered to be reliable. While every effort has been made to ensure accuracy and completeness, RBC Financial Group makes no such representation or warranty, express or implied. This report is for information purposes only and does not constitute an offer to sell or a solicitation to buy securities.