Fed notes better economy

WASHINGTON (AP) — The Federal Reserve sketched a mildly brighter view of the economy Tuesday after a burst of hiring since its last meeting in January. It took no further steps to aid the recovery and repeated its plan to keep short-term interest rates near zero through 2014.

After a one-day policy meeting, the Fed said unemployment should continue to decline gradually as the economy expands. It also noted that consumer spending and business investment have picked up.

And it took a more hopeful view of Europe’s debt crisis. Though the crisis still threatens the global economy, the danger has eased, the Fed said.

The Fed’s policymaking committee “is clearly shifting its stance away from blanket gloom to something more realistic,” said Ian Shepherdson, an economist at High Frequency Economics.

The policymakers did caution that rising oil and gas prices will raise inflation temporarily. But they said longer-term inflation should remain stable — repeating a view expressed by Chairman Ben Bernanke earlier this month.

The statement was approved on a 9-1 vote. Atlanta Fed President Jeffrey M. Lacker dissented for the second straight meeting. The statement said Lacker doesn’t “anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.”

Analysts said the Fed seems inclined to see if the economy can sustain its recent gains. On Tuesday, for example, the government said Americans stepped up their spending on retail goods in February and spent more in December and January than first estimated.

Most economists say any further steps by the Fed, such as another bond buying program to try to drive interest rates even lower to boost the economy, aren’t likely soon.

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