Economic Recovery Slows

Federal Open Market Committee said that it would roll over the Federal Reserve's maturing holdings of federal agency debt and mortgage-backed securities into longer-term Treasury securities (primarily two- to 10-year securities). This should keep long-term interest rates low, including mortgage rates. - Courtesy of OpenCongress

In a statement following its Aug. 10 meeting, the Federal Open Market Committee (FOMC) observed that the pace of recovery in output and employment has slowed in recent months. This was hardly earth-shattering news, just an acknowledgement of what was widely understood to be the case.

FOMC went on to observe that household spending was advancing, if only slowly, constrained by high unemployment, modest income growth, lower housing wealth and tight credit. FOMC also noted that the pace of economic recovery is likely to be more modest in the near term than had been anticipated. Landscape firms need to be prepared that the economic recovery, after the housing bust, could still take several years.

The committee held to the target federal funds rate range of 0 to 0.25 percent, first announced in mid-December 2008. Further, as it previously stated, FOMC said it expected to maintain the exceptionally low levels of the federal funds rate for an extended period.

- Courtesy of NAHB