Fed maintains low rates pledge

Not too much change from the FOMC on Tuesday. Bloomberg reports:

Federal Reserve officials repeated their pledge to keep the main interest rate near zero for an “extended period” and confirmed that emergency measures to prop up the housing market will end as planned this month.

While the economy has “continued to strengthen,” policy makers noted that “housing starts have been flat at depressed levels” and “employers remain reluctant to add to payrolls.”

The details of the housing data released on Tuesday were provided in another Bloomberg report.

Housing starts fell in February as record snowfall in parts of the U.S. hampered construction, while fewer building permits signaled the recovery in real estate will take longer to unfold.

Builders broke ground on 575,000 homes at an annual rate, down 5.9 percent from 611,000 in January, Commerce Department figures showed today in Washington. February starts reflected declines in the Northeast and South, which experienced winter storms...

Building permits, a sign of future construction, decreased 1.6 percent to a 612,000 annual rate after a 4.7 percent drop in January. Permits were forecast to decrease to a 601,000 annual pace, according to the survey median.

Low interest rates by the Fed would be even better justified if the reversal in import prices in February sticks.

The Labor Department reported that its import price index fell 0.3 percent, the first decline in seven months, pointing to few signs of inflation from abroad. Economists forecast a 0.2 percent drop, according to the median estimate in a Bloomberg survey.