Much of the Same from the FOMCby Tim Manni
The Federal Open Market Committee (FOMC) ended their two-day meeting today the same way they have been for months now: keeping the target for the Fed funds rates between 0 and 0.25%, and claiming that the economy continues to recover, albeit very slowly:
Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
The committee stated that their target date to end their support for conforming mortgage rates hasn’t changed, yet their statement following the meeting left the door open to modifying their exit strategy if market conditions call for it:
To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.
Click here to read the FOMC’s statement in its entirety.