By Richard Roth, J.D., Editor, the Federal Banking Law Reporter, Bank Compliance Guide, Bank Digest; co-author, Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.
The Federal Open Market Committee announced after its meeting that ended March 20, 2013, that it would continue to keep the target for the federal funds rate at a range of 0 to .25 percent. It also intends to continue its purchases of agency mortgage-backed securities and longer-term Treasury securities at a pace that will total $95 billion per month. The FOMC cited projections of continued moderate economic growth, gradually falling unemployment rates, and low inflation expectations as supporting its decisions.
Following the FOMC's announcement, House Financial Services Committee Chairman Jeb Hensarling, R-Tex., stated, “The Federal Reserve's continued efforts at economic stimulus clearly are not working.” He added, “So, for what little, if any, benefit the Fed's current strategy creates, the risks and dangers it poses are considerable.”
Rep. John Campbell, R-Calif., Chairman of the Financial Services Subcommittee on Monetary Policy and Trade, noted, “Despite the very slight pick-up in growth mentioned in the FOMC's statement, I remain concerned that the benefits of persistently low interest rates and continued asset purchases are flowing to areas of the economy that are not ultimately creating jobs. Meanwhile, the risks to the Federal Reserve, taxpayers, and the economy as a whole continue to escalate.”