WASHINGTON — The Federal Reserve said Wednesday that the U.S. economy is losing strength and repeated a pledge to try to boost growth if hiring remains weak.
The Fed took no new action after a two-day policy meeting. But it acknowledged in a statement released after the meeting that economic activity had slowed over the first half of the year, with job creation slackening and consumer spending tapering off.
The Fed reiterated its plan to hold its benchmark short-term interest rate at a record low near zero until at least late 2014.
Market reaction to the Fed’s announcement was muted. Stocks fluctuated slightly after the statement was released and ended the day lower. The statement was slightly different than the one issued after the Fed’s last meeting June 19 and 20.
In addition to noting that the economy had “decelerated,” the Fed’s policymaking committee said it would “closely monitor incoming information” and “will provide additional accommodation as needed” to stimulate the economy and job creation. In the June statement, the central bank said “the economy has been expanding moderately” and that it “is prepared to take further action as appropriate.”
Many economists believe the Fed could launch another program of buying government bonds and mortgage-backed securities at its September meeting in an effort to drive long-term rates, which are already at record lows, even lower.
