Fed cites "pause" in growth, stands by stimulus

Federal Reserve
Posted at 11:00 PM, Jan 30, 2013
and last updated 2013-01-30 23:00:00-05

WASHINGTON (AP) — The Federal Reserve says growth "paused" in recent months and reaffirmed its commitment to boost a sluggish U.S. economy by keeping borrowing cheap for the foreseeable future.

The Fed took no new action after a two-day policy meeting. But it stood behind aggressive steps it launched in December to try to reduce unemployment.

Last month the Fed said it would keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. And it said it would keep buying $85 billion a month in Treasurys and mortgage bonds to try to keep borrowing costs low and encourage spending.

The Fed says the slowdown was because of weather-related disruptions and temporary factors.

Economic growth shrank from October through December for the first time since 2009.