‘We Are Committed to Using Our Full Range of Tools,’ Fed Chair Says

The Fed’s response to this extraordinary period is guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system. We are committed to using our full range of tools to support the economy in this challenging time. With weak demand and large price declines for some goods and services such as apparel, gasoline, air travel and hotels, consumer price inflation has dropped noticeably in recent months. But indicators of longer-term inflation expectations have remained fairly steady. As output stabilizes and the recovery moves ahead, inflation should stabilize and then gradually move back up over time closer to our symmetric 2 percent objective. Inflation is nonetheless likely to remain below our objective for some time. The economy has weathered recent events and is on track to achieve maximum employment and price stability goals. We have also been taking broad and forceful actions to support the flow of credit in the economy. Since March, we have been purchasing sizable quantities of Treasury securities and agency mortgage-backed securities, in order to support the smooth functioning of these markets, which are vital to the flow of credit and the economy.