Fed Sees ‘Moderate’ Recovery Continuing; Downplays Inflation Concerns

Federal Reserve policy makers said Wednesday that the U.S. economy is recovering at a “moderate pace” and that any inflation surge likely to be temporary, while agreeing keeping interest rates at a record low rate, Bloomberg reported.

At his first press conference, Fed Chairman Ben Bernanke signaled he will maintain record stimulus rates until job growth accelerates and the economic recovery is strong enough to withstand tighter credit.

He has said he expects that a surge this year in fuel and food costs will have only a passing inflationary impact, differing with Fed regional bank presidents who say borrowing costs may need to rise to contain prices, Bloomberg reported.

The Fed also agreed to finish $600 billion of bond purchases on schedule in June, Bloomberg said.

Holding the interest rate at a record low zero to 0.25% was the 19th straight time the Fed has kept the rate at that level; it first did so in December 2008.

Click here for the Fed’s full statement. (Federal Reserve website.)