Comparing the Fed’s views on inflation, rates

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WASHINGTON (AP) — A comparison of the Federal Reserve’s statements from its two-day meeting that ended Wednesday and its Dec. 13 meeting:

INTEREST RATES:

December: The Fed “anticipates that economic conditions … are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”

January: This is the most newsworthy change in the statement. The Fed “anticipates that economic conditions … are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

INFLATION:

Then: “Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable.”

Now: The Fed sees prices in check and little threat of inflation, which gives it more room to keep the interest rate it controls at its current record-low level of nearly zero. “Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.” Fed policymakers also left off a sentence from previous statements that said they would “continue to pay close attention to the evolution of inflation and inflation expectations.”

FED POLICY:

Then: Fed policymakers “will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.”

Now: The Fed says that it “expects to maintain a highly accommodative stance for monetary policy.”

ECONOMY:

Then: The Fed “continues to expect a moderate pace of economic growth over coming quarters…”.

Now: The Fed’s take on the economy hasn’t changed much. It “expects economic growth over coming quarters to be modest…”.

UNEMPLOYMENT:

Then: “While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated.”

Now: Little change here: “While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated.”