Fed says will keep holdings of securities at current level by reinvesting principal payments from agency debt, MBS in longer-term treasuries

  • Will continue to roll over holdings of treasury securities as they mature
  • To keep rates exceptionally low for an extended period of time, keeps fed funds rate at zero to 0.25% range
  • Pace of recovery has slowed in recent months
  • Pace of recovery is likely to be more modest in near term than had been anticipated
  • Will provide technical guidance on operations later this afternoon
  • Measures of inflation have trended lower in recent quarters
  • Inflation likely to be subdued for some time
  • Household spending increasing gradually but constrained by high unemployment, housing, tight credit
  • Vote on policy was 9-1 with Hoenig dissenting
  • Fed will monitor outlook and employ policy tools as necessary to promote recovery