WASHINGTON — The Fed will continue open-ended programs to purchase longer-term Treasuries at a rate of $45 billion per month and mortgage-backed securities at a $40 billion per month, the Federal Open Market Committee said in a statement released Wednesday following the FOMC's two-day meeting.
The committee is maintaining its existing policy of reinvesting principle payments from its holdings of agency debt and agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions "maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."
The FOMC also decided to keep the target range for the federal funds rate at zero to 0.25% and said it currently anticipates that exceptionally low levels for the federal funds rate will likely be warranted as long as the unemployment rate remains above 6.5% and inflation is projected to be no more than 2.5%
Voting against the decision was Kansas City Fed Bank President Esther L. George, who was concerned that the "continued high level of monetary accommodation increases risks of future economic and financial imbalances," and could cause an increase in long-term inflation expectations.
