The Federal Open Market Committee (FOMC) released its statement this afternoon for its April meeting. The market is looking for it to answer questions such as: Will anyone join the dissents of maverick committee member Thomas Hoenig? Will the FOMC retain its "extended period" language regarding how long rates will remain exceptionally low? Will the Fed indicate it intends to soon begin selling some of the securities on its balance sheet? Its short April statement probably won't satisfy the market's hunger for all of this knowledge, but some answers are provided.
First and foremost, Kansas City Fed President Hoenig remained the lone dissenter. The reason he voted agains the policy action was the same as for the past few months: the Fed continues to use the "extended period" language to explain how long it will keep rates very low, much to Hoenig's dismay. He remains concerned that the Fed won't have as much flexibility to raise rates if inflation suddenly ramps up. He's still the only committee member worried enough about this possibility to dissent, however.
To be sure, the Fed thinks the economy has continued to improve since March and sees a moderate recovery for a time. It notes that spending by business on equipment and software, and by households, has continued to improve. But it still sees consumers restraining themselves, due to high unemployment, low income growth, reduced wealth, and low credit. It also noted that businesses remain reluctant to add payrolls.