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Fed says economic recovery on firmer footing

March 15, 2011

WASHINGTON — The Federal Reserve expressed more confidence in the U.S. economy even as Japan's nuclear crisis raised worries around the globe.

The Fed said the the economic recovery is on "firmer footing" and the jobs market is "improving gradually," in a statement released after its meeting Tuesday.

That's a notable change in tone from the Jan. 26 meeting. After that meeting, Fed policymakers said the rate of economic activity was "insufficient" to bring about "significant improvement" in the job market.

The Fed on Tuesday, in a unanimous decision, said it was maintaining the pace of its $600 billion Treasury bond-purchase program to help the economy grow more strongly and to lower unemployment, which now stands at 8.9 percent.

The Fed made no mention of Japan's crisis, which caused stocks to plunge earlier in the day. But the Fed's stimulative policy would help the U.S. economy withstand widening economic risks from home and abroad.

The bond-purchase program, which is slated to end in June, is intended to lower loan rates and boost stock prices. Those forces should spur Americans to spend more and companies to hire more.

The Fed also downplayed inflation risks. It said higher energy prices is increasing inflation, but that the pickup in prices will be "transitory."

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