But because the recovery looks as though it will be gradual, and because it started with the economy in a deep hole, with large margins of underutilized labor and capital resources and low inflation likely to persist well into the future, the Federal Open Market Committee has stated that the current exceptionally low level of interest rates is likely to be required for “an extended period” to make progress toward our legislative goals of maximum employment and stable prices.
The exceptionally low rates help offset the lingering restraining effects on economic activity and prices discussed earlier. In due course, as these restraints abate and the expansion matures, we will need to withdraw monetary stimulus to prevent the development of inflationary pressures.