And the turn toward austerity is set to accelerate on Friday if the mandatory federal spending cuts known as sequestration start to take effect as scheduled.
In addition to the tax increases and broad federal spending cuts (known as "sequestration") scheduled to take effect at the end of this year, the emergency unemployment benefits system is also expected to come to an end.
The FOMC released its statement after two key reports suggested that recovery in the jobs market is slowing, as end of year tax hikes and budget cuts – known as sequestration – seem to take their toll.The Fed announced on Wednesday that it would keep pumping $85bn a month into the US economy, citing concerns about the impact Washington's budget cuts are having on the US recovery.
Congress is still driving headlong into the forced austerity known as sequestration, scheduled to take effect in March, which requires across-the-board spending cuts at the Pentagon and among domestic policy programs.
He said: We will see what happens on Friday, but everybody is assuming that sequestration is going to take effect.
(Under the New Year's Eve deal in Congress to head off the "fiscal cliff," automatic massive budget cuts, known as sequestration, are scheduled to take place in March).
"Sequestration is going to take 10% off our military budget and, as I look at it, out of a group of 10 soldiers, one doesn't have a helmet, one doesn't have body armour, one doesn't have a radio.
The Obama administration has called for increases in domestic discretionary spending roughly 7percentt above the sequestration caps set to take hold in October.
Officials said the releases, which began last week and continued on Tuesday, were a response to the possibility of automatic governmentwide budget cuts, known as sequestration, which are scheduled to take effect on Friday.
