WASHINGTON - The Federal Reserve reaffirmed its plan to purchase $600 billion Treasury through the second half of 2011, while the fed funds rate was held at the zero to 0.25% range, the Federal Open Market Committee announced Tuesday.
The economic recovery “is recovering,” the Fed said, though “at a rate that has been insufficient to bring down unemployment.”
Household spending is increasing, but is “constrained by high unemployment,” the Fed said.
Thomas M. Hoenig, voting for the last time in the cycle, dissented saying “a continued high level of monetary accommodation would increase the risks of future economic and financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.”
