The Federal Reserve said the economy has slowed and foreshadowed new steps to boost the weakening expansion.
“Economic activity decelerated somewhat over the first half of this year,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. “The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
At the September meeting, policy makers will update their forecasts for growth, unemployment, inflation and interest rates before Bernanke holds a press conference. He doesn’t plan a press conference today.
The U.S. two-year interest-rate swap spread, a measure of stress in bond markets, traded today at about 20.5 basis points, about the lowest in a year and down from 2012’s high of almost 60 basis points in October. The gauge, which dropped 4.4 basis points in July for the second straight monthly decline, widens when investors seek the perceived safety of government securities and narrows when they favor assets such as corporate bonds.