Fed expects low rates through 2014

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WASHINGTON, April 25 (UPI) -- The U.S. Federal Reserve Wednesday said the economy was growing "moderately," but it was still a long way off from changing its monetary policy.

The central bank said its Open Market Committee "expects to maintain a highly accommodative stance for monetary policy … at least through late 2014," referring to the federal fund rate, which has stood at zero to 0.25 percent since the financial crisis hit."

The announcement continues two experiments. The first is the "accommodative" stance of making funds available so cheaply, at historically low interest rates, for so long. Secondly, the Fed is continuing its policy of being explicit in describing its intentions so far in advance.

Before the financial crisis -- and while under the directorship of Chairman Ben Bernanke -- the Fed has reduced its use of coded hints in its communications. Although it can change its stance at any time, it is not like the Fed to commit itself to a particular policy for this long.

The Fed said it would also continue to roll over short-term securities in its portfolio to longer-term notes to convince the business community borrowing would remain cheap for a long time.

The Fed said information "received since March suggests that the economy has been expanding moderately."

Price inflation picked up the pace recently, but was expected to subside in the coming months. The unemployment rate "has declined, but remains elevated," the bank said in a statement.

"Despite some signs of improvement, the housing sector remains depressed," the statement said.

The policy was approved by a 9-1 vote. Committee member Jeffrey Lacker "does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014," the Fed noted.