The Federal Open Market Committee (FOMC) has decided to maintain the target range for the federal funds rate at 0% to 0.25%, according to an FOMC statement posted on the Federal Reserve's Web site Wednesday.
Saying financial market conditions are ‘roughly unchanged, on balance,’ since the committee met in September, the FOMC reaffirmed its previously announced position that it will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities (MBS).
The purchases – a total of $1.25 trillion of agency MBS and about $175 billion of agency debt – are still expected to be executed by the end of the first quarter of 2010, the FOMC reports.
"Although economic activity is likely to remain weak for a time, the committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability," the FOMC statement says. "With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the committee expects that inflation will remain subdued for some time."
The Federal Reserve will continue to monitor the size and composition of its balance sheet and make adjustments to its credit and liquidity programs as warranted, the FOMC statement adds.
SOURCE: Federal Open Market Committee