You Are a Newly Hired Reporter for the Daily Tribune

question 49

Essay

You are a newly hired reporter for the Daily Tribune and have been asked to track the Fed's Federal Open Market Committee (FOMC) to report what the likely monetary policy will be. On December 12, 2012 the FOMC statement reads:
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.
(Press Release, FOMC, December 12, 2012.
Source: www.federalreserve.gov/newsevents/press/monetary/20121212a.htm)
What does the FOMC statement suggest the Fed thinks about current economic conditions and what it intends to do in the near future?

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Definitions:

Total Resistance

The overall opposition to electric current flow within a circuit, typically measured in Ohms (Ω), considering all series and parallel resistances.

Circuit Branch

A point in an electric circuit where current can flow in more than one direction.

Load

The power consumed by a piece of equipment or a circuit while performing its function.

Increase Of Load

Refers to a situation where the demand for current or power in a circuit increases, which can affect the performance of the electrical system, including voltage levels and stability.