Fed Sees Risk of Disinflation, Maintains Bond Buying Pace

The Federal Reserve said persistently low inflation could hamper the economic expansion and pledged to keep buying $85 billion in bonds every month.

“The committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term,” the Federal Open Market Committee said today after a two-day meeting in Washington. Growth will “pick up from its recent pace.”