No U-turn on economic aid, Bernanke insists

The US Federal Reserve stood firm in its commitment to an exceptionally loose monetary policy in the world's largest economy, dismissing concerns yesterday over inflation and promising to hold interest rates at their current zero rate for an extended period.

While other central banks around the world have begun to tighten monetary policy – or at least to signal that they soon may – the latest statement by the Fed's federal open market committee (FOMC) was notable for its adherence to previous guidance.

"Economic conditions, including low rates of resource utilisation, subdued inflation trends, and stable inflation expectations, are likely to warrantexceptionally low levels for the federal funds rate for an extended period," it said. The Fed's decision was accompanied by an unprecedented televised press conference by its chairman, Ben Bernanke. Following in the footsteps of other central bankers, including the heads of the Bank of England and the European Central Bank, Mr Bernanke will take questions from the media after each FOMC decision from now on, in the hope that increased access and transparency will defuse persistent criticism of the Fed.

Loose monetary policy, and the subsequent weakness of the dollar, has turned the Fed into a lightning rod for criticism from the right of the political spectrum, but the FOMC appeared unruffled by commodity price inflation, including the above-$100 price of a barrel of oil and the consequent surge in petrol prices in the US. Its slightly brighter assessment of the economy added no new warnings on inflation, except to note that it had "picked up" since the last meeting in March.

"The economic recovery is proceeding at a moderate pace and overall conditions in the labour market are improving gradually" it said.

The Dow Jones Industrial Average spiked higher in the moments after the statement was released, as traders scaled back their expectations for tighter monetary policy later this year. The Fed will finish its programme of quantitative easing – the purchase of $600bn of US Treasuries – by the end of June, but stuck by its promise to keep replacing the bonds when they expire.

The Fed deliberated monetary policy against a backdrop of the continuing high unemployment rate, which was 8.8 per cent last month, and weakening economic growth. GDP figures for the first quarter will be released this morning and are expected to have fallen to around 2 per cent, from anannualised rate of 3.1 per cent in the final three months of 2010.

The last piece of economic datareleased before the GDP number was information on durable goods orders for March, a key gauge of business investment. New orders for manufactured goods meant to last at least three years increased 2.5 per cent, in line with expectations. The figure was even better because the Commerce department revised the figure for February from a decline to an increase of 0.7 per cent.

Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
i100This Instagram photo does not prove Russian army is in Ukraine
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Morrissey pictured in 2013
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Robyn Lawley
ebookA unique anthology of reporting and analysis of a crucial period of history
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In my grandfather's First World War footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during the war. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end