Fed Keeps Stimulus in Place; Awaits Sustained Recovery



The Federal Reserve said it will maintain its $85 billion monthly bond purchases until it sees more evidence that economic improvement will be sustained.

The Fed said in a news release, “Taking into account the extent of federal fiscal retrenchment over the past year, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”

In addition, the Fed said it will keep the target range for the federal funds rate at 0 to 0.25% and currently anticipates that this range will be appropriate at least as long as the unemployment rate remains above 6.5%.

To read the full news release click here.


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