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Date published: 1/31/2013
AP Economics Writer
WASHINGTON--The Federal Reserve said Wednesday that the U.S. economy "paused" in recent months because of temporary factors and reaffirmed its commitment to try to stimulate growth by keeping borrowing cheap for the foreseeable future.
The Fed took no new action at its two-day policy meeting. But it stood behind aggressive steps it launched in December to try to reduce unemployment, in a statement released after the meeting.
Last month, the Fed said it would keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. The rate is currently 7.8 percent.
And it said it would keep buying $85 billion a month in Treasurys and mortgage bonds to try to keep borrowing costs low and encourage spending.
In its statement, the Fed said "economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors."
Despite the slowdown, the statement noted that hiring continued to expand at a moderate pace, consumer spending and business investment increased and the housing sector showed further improvement. And it said strains in global financial markets have eased somewhat, but cautioned that risks remain.
The Fed's decision to continue its stimulus program was largely expected and had little impact on stock and bond prices.