The Federal Open Market Committee decided to keep its policy target rate and large-scale asset purchase programs basically unchanged when it met Sept. 22-23, according to minutes of the meeting released yesterday.

Members believe “a gradual reduction in the pace at which the Federal Reserve buys agency debt and agency [mortgage-backed securities] could help promote a smooth transition in markets as the announced asset purchases are completed” — similar to the approach used for the purchase of Treasury securities. “Most participants supported extending purchases of agency debt and agency MBS through the first quarter of 2010,” the minutes state.

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