WASHINGTON—Minutes released from the October meeting of the Federal Open Market Committee suggest that economic activity is expanding at a moderate pace and that a 0 to 25 basis point target range for the federal funds rate will remain in place for “a considerable time.”
“Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish,” the FOMC said in the minutes released yesterday. “Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective, partly reflecting declines in energy prices. Market-based measures of inflation compensation have declined somewhat further; survey-based measures of longer-term inflation expectations have remained stable.”
The FOMC said it expects inflation to rise gradually toward 2% as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.