Information received since the Federal Open Market Committee met in
August suggests that economic activity has continued to expand at a
moderate pace in recent months. Growth in employment has been slow, and
the unemployment rate remains elevated. Household spending has continued
to advance, but growth in business fixed investment appears to have
slowed. The housing sector has shown some further signs of improvement,
albeit from a depressed level. Inflation has been subdued, although the
prices of some key commodities have increased recently. Longer-term
inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.
To
support a stronger economic recovery and to help ensure that inflation,
over time, is at the rate most consistent with its dual mandate, the
Committee agreed today to increase policy accommodation by purchasing
additional agency mortgage-backed securities at a pace of $40 billion
per month. The Committee also will continue through the end of the year
its program to extend the average maturity of its holdings of securities
as announced in June, and it is maintaining its existing policy of
reinvesting principal payments from its holdings of agency debt and
agency mortgage-backed securities in agency mortgage-backed securities.
These actions, which together will increase the Committee’s holdings of
longer-term securities by about $85 billion each month through the end
of the year, should put downward pressure on longer-term interest rates,
support mortgage markets, and help to make broader financial conditions
more accommodative.
Read more: http://www.cnbc.com/id/49019111
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