Today, the Federal Reserve’s Federal Open Market Committee (FOMC) released a statement regarding the FOMC’s view of the present state of the U.S. economy and the likelihood of future changes in the Federal Reserve’s open market activities.

The statement reports that information received since the FOMC met in August “indicates that the pace of recovery in output and employment has slowed in recent months.” Household spending, according to the statement, “is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit.” In addition, the report notes that spending by businesses on equipment is rising, “but less rapidly than earlier this year." Investment in nonresidential structures continues to be weak, according to the report. The report anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.

The statement continues by assessing inflation as being “at levels somewhat below” those levels the FOMC “judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability” and that it is “likely to remain subdued for some time before rising” to such levels.

As a result, the statement reports that the FOMC “will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” In addition, the statement says that the FOMC will continue its policy of reinvesting principal payments from its securities holdings.

As was the case in August, the sole dissenting vote against the policy was Thomas M. Hoenig. According to the statement, Mr. Hoenig “judged that the economy continues to recover at a moderate pace.” According to the report Mr. Hoenig believed “that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth.” Finally, the report adds that Mr. Hoenig believed that “given economic and financial conditions,” he did not support continued reinvestment of principal payments from its securities holdings.