“The Federal Reserve will keep purchasing securities at the rate of $85 billion a month as the economy paused because of temporary forces including bad weather.
“Growth in economic activity paused in recent months in large part because of weather-related disruptions and other transitory factors,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. “Household spending and business fixed investment advanced, and the housing sector has shown further improvement.”
Chairman Ben S. Bernanke has unleashed the power of the central bank to buy unlimited amounts of Treasury and mortgage- backed securities in a bid to end a four-year long period of unemployment above 7.5 percent and bolster an economy that shrank 0.1 percent in the fourth quarter.
“Although strains in global financial markets have eased somewhat, the committee continues to see downside risks to the economic outlook,” the FOMC said.
The purchases will remain divided between $40 billion a month of mortgage-backed securities and $45 billion a month ofTreasury securities. The central bank also will continue reinvesting any Treasury securities that mature and will reinvest its portfolio of maturing housing debt into agency mortgage-backed securities.
The Fed repeated that the purchases will continue “if the outlook for the labor market does not improve substantially.”
The Fed also left unchanged its statement that it planned to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation remains below 2.5 percent.
