The Federal Reserve keeps rates unchanged at 0.25%

Wed, Nov 4 2009, 19:33 GMT
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FXstreet.com (Barcelona) – The Federal Reserve’s Monetary Policy Committee has decided by 10 votes to 0 to keep interest rates unchanged at all-time low 0.25%, and affirmed that economic conditions are “likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

Furthermore, the Fed announced its plan to purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt, in order to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets.

Economic activity has continued picking up, according to the Bank, while conditions in financial markets remain “roughly unchanged” since the last monetary policy meeting. While the housing sector's activity seems to start improving and household spending appears to be expanding, the Fed warns about resilient unemployment might constrain consumption.

While economic activity is likely to ciontinue4 weak for asome time, the Bank affirms that “policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.”

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