Fed Leaves Key Interest Rate Unchanged
September 25, 2009 by admin
Filed under Market Reports
Federal Reserve System Press Release Date: September 23, 2009
The Federal Reserve this morning announced it will maintain its target for the federal funds rate in the 0 percent to 0.25 percent range, and expects economic conditions to warrant exceptionally low levels of the federal funds rate for an extended period of time. “Information . . . suggests that economic activity has picked up following its severe downturn,” the Fed said in a prepared statement.
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“Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.”
To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve also said it will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt, and will gradually slow the pace of these purchases in order to promote a smooth transition in markets.
