FED Maintains Bond Buying
The Federal Reserve said the economy is still growing modestly and unemployment remains elevated as it maintains $40 billion in monthly purchases of mortgage-backed securities aimed at spurring the three-year expansion.
“Growth in employment has been slow,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. “Household spending has advanced a bit more quickly.”
Fed Chairman Ben S. Bernanke is leading a third round of unprecedented bond-buying as he seeks to speed job creation for 12.1 million unemployed Americans. The FOMC, in its last scheduled meeting before the presidential election, repeated today that it would press on with the asset purchases until the labor market improves “substantially.”
“Strains in global financial markets continue to pose significant downside risks,” the statement said. “Inflation recently picked up somewhat, reflecting higher energy prices.” It said longer-term inflation expectations have remained stable.
Treasury 10-year notes remained lower after the statement, and stocks pared gains. The Standard & Poor's 500 Index was up less than 0.1 percent to 1,413.70 at 2:18 p.m. in New York after rising as much as 0.5 percent.
The Fed left unchanged its statement that highly accommodative monetary policy will be appropriate “for a considerable time after the economic recovery strengthens” and repeated that interest rates are likely to stay near zero “at least through mid-2015.”
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