The Federal Reserve on Wednesday noted the “sharp” slowdown in the U.S. economy in the first quarter, when growth nearly stalled to a 0.1 percent pace, but did not indicate that would change its plans to gradually remove stimulus from the economy.
In a statement after a meeting of its rate-setting committee, officials at the central bank said they would continue with the campaign to cut back purchases of U.S. Treasury and mortgage bonds, this time by another $10 billion a month. The Fed said the risks for either a setback for the economy or faster growth and inflation were about balanced.
Like most economists, the central bank expects growth to revive in the current quarter as the effects from the frigid winter weather wear off and businesses and consumers unleash pent-up demand.
“Growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions,” the statement said.
“The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually” for the rest of the year.