InformationreceivedsincetheFederalOpenMarketCommitteemetinOctoberDecembersuggeststhat growthineconomicactivityandemploymenthavecontinuedtoexpandatamoderatepacepausedin recentmonths,apartfrominlargepartbecauseofweatherrelateddisruptions.Althoughandother transitoryfactors. Employmenthascontinuedtoexpandatamoderatepacebuttheunemploymentratehasdeclined somewhatsincethesummer,itremainselevated.Householdspendinghascontinuedtoadvanceand businessfixedinvestmentadvanced,andthehousingsectorhasshownfurthersignsofimprovement, butgrowthinbusinessfixedinvestmenthasslowed.Inflationhasbeenrunningsomewhatbelowthe Committeeslongerrunobjective,apartfromtemporaryvariationsthatlargelyreflectfluctuationsin energyprices.Longerterminflationexpectationshaveremainedstable. Consistentwithitsstatutorymandate,theCommitteeseekstofostermaximumemploymentandprice stability.TheCommitteeremainsconcernedexpectsthat,withoutsufficientwithappropriatepolicy accommodation,economicgrowthmightnotbestrongenoughtogeneratesustainedimprovementin labormarketconditions.Furthermore,willproceedatamoderatepaceandtheunemploymentratewill graduallydeclinetowardlevelstheCommitteejudgesconsistentwithitsdualmandate.

e.Althoughstrains inglobalfinancialmarketscontinuetoposesignificanthaveeasedsomewhat,theCommitteecontinues toseedownsideriskstotheeconomicoutlook.TheCommitteealsoanticipatesthatinflationoverthe mediumtermlikelywillrunatorbelowits2percentobjective. Tosupportastrongereconomicrecoveryandtohelpensurethatinflation,overtime,isattheratemost consistentwithitsdualmandate,theCommitteewillcontinuepurchasingadditionalagencymortgage backedsecuritiesatapaceof$40billionpermonth.TheCommitteealsowillpurchaseandlongerterm TreasurysecuritiesafteritsprogramtoextendtheaveragematurityofitsholdingsofTreasurysecurities iscompletedattheendoftheyear,initiallyatapaceof$45billionpermonth.TheCommitteeis maintainingitsexistingpolicyofreinvestingprincipalpaymentsfromitsholdingsofagencydebtand agencymortgagebackedsecuritiesinagencymortgagebackedsecuritiesand,inJanuary,willresumeof rollingovermaturingTreasurysecuritiesatauction.Takentogether,theseactionsshouldmaintain downwardpressureonlongerterminterestrates,supportmortgagemarkets,andhelptomakebroader financialconditionsmoreaccommodative. TheCommitteewillcloselymonitorincominginformationoneconomicandfinancialdevelopmentsin comingmonths.Iftheoutlookforthelabormarketdoesnotimprovesubstantially,theCommitteewill continueitspurchasesofTreasuryandagencymortgagebackedsecurities,andemployitsotherpolicy toolsasappropriate,untilsuchimprovementisachievedinacontextofpricestability.Indetermining

thesize,pace,andcompositionofitsassetpurchases,theCommitteewill,asalways,takeappropriate accountofthelikelyefficacyandcostsofsuchpurchases. Tosupportcontinuedprogresstowardmaximumemploymentandpricestability,theCommittee expectsthatahighlyaccommodativestanceofmonetarypolicywillremainappropriatefora considerabletimeaftertheassetpurchaseprogramendsandtheeconomicrecoverystrengthens.In particular,theCommitteedecidedtokeepthetargetrangeforthefederalfundsrateat0to1/4percent andcurrentlyanticipatesthatthisexceptionallylowrangeforthefederalfundsratewillbeappropriate atleastaslongastheunemploymentrateremainsabove61/2percent,inflationbetweenoneandtwo yearsaheadisprojectedtobenomorethanahalfpercentagepointabovetheCommittees2percent longerrungoal,andlongerterminflationexpectationscontinuetobewellanchored.TheCommittee viewsthesethresholdsasconsistentwithitsearlierdatebasedguidance.Indetermininghowlongto maintainahighlyaccommodativestanceofmonetarypolicy,theCommitteewillalsoconsiderother information,includingadditionalmeasuresoflabormarketconditions,indicatorsofinflationpressures andinflationexpectations,andreadingsonfinancialdevelopments.WhentheCommitteedecidesto begintoremovepolicyaccommodation,itwilltakeabalancedapproachconsistentwithitslongerrun goalsofmaximumemploymentandinflationof2percent. VotingfortheFOMCmonetarypolicyactionwere:BenS.Bernanke,Chairman;WilliamC.Dudley,Vice Chairman;JamesBullard;ElizabethA.Duke;DennisP.Lockhart;SandraPianaltoCharlesL.Evans;Jerome H.Powell;SarahBloomRaskin;EricS.Rosengren;JeremyC.Stein;DanielK.Tarullo;JohnC.Williams; andJanetL.Yellen.VotingagainsttheactionwasJeffreyM.LackerEstherL.George,whoopposedwas concernedthattheassetpurchaseprogramcontinuedhighlevelofmonetaryaccommodationincreased therisksoffutureeconomicandthecharacterizationoftheconditionsunderwhichfinancialimbalances and,overtime,couldcauseanexceptionallylowrangeforthefederalfundsratewillbeappropriate. increaseinlongterminflationexpectations.