NEW YORK - The Federal Reserve will purchase $600 billion of longer-term Treasuries in the first half of 2011, the Federal Open Market Committee announced Wednesday.
The Fed expects about 46% of the purchases will be for securities maturing in 5.5 to 10 years, while the New York Fed anticipates the assets purchased will have an average duration of five to six years.
In addition, the Fed said it will continue to re-invest in principal payments from its securities holdings.
The FOMC held the fed funds rates at a range between zero and 0.25%.
Thomas M. Hoenig voted against the decision, because he believes “the risks of additional securities purchases outweighed the benefits” and that a “continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.”
