The US Federal Reserve held its key interest rate at historic lows on Wednesday and said the economy was continuing its modest recovery despite financial headwinds from abroad.
The Federal Open Market Committee (FOMC) said it was maintaining its federal funds rate target between zero and 0.25 percent, where it has been pegged since December 2008 to help the economy recover from its worst recession in decades.
The central bank’s rate decision was widely expected after economic reports since the last FOMC meeting two months ago showed the government-fueled recovery was still struggling.
“Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually,” the policy-setting FOMC said in a statement at the conclusion of a two-day meeting.
It said economic conditions were likely to warrant keeping “exceptionally low” rates “for an extended period,” repeating the language used in previous statements.
“The pace of economic recovery is likely to be moderate for a time,” the panel headed by Fed Chairman Ben Bernanke said.
But the Fed statement suggested that Europe’s fiscal problems were taking a toll.
“Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad,” the committee said, likely referring to the eurozone sovereign crisis.
The FOMC said that household spending, which usually accounts for two-thirds of the US’ economic activity, “is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit.”
Nine of the 10 FOMC members voted to maintain the target range on the federal funds rate, the interest rate banks charge each other overnight.
The lone dissenter was Kansas City Fed President Thomas Hoenig, dissenting for the fourth time since the Jan. 27 FOMC meeting.
The statement said Hoenig objected to the “extended period” language because it could lead to “a build-up of future imbalances and increase risks to longer-run macroeconomic and financial stability, while limiting the committee’s flexibility to begin raising rates modestly.”
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
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