Today, the Federal Reserve's Federal Open Market Committee (FOMC) issued a statement that included a somewhat more upbeat assessment of the prospects for economic recovery than prior FOMC statements. "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 support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability."
The FOMC voted unanimously to leave the target federal funds rate at a range of zero to 0.25%, warning "that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The FOMC also announced that it would "gradually slow the pace" of securities purchases under its program to acquire up to $1.25 trillion of mortgage-backed securities "in order to promote a smooth transition in markets" and that it anticipated extending those purchases into "the first quarter of 2010." The Federal Reserve had previously indicated that it expected all purchases to be completed by year-end 2009. The FOMC also confirmed that the Federal Reserve's "purchases of $300 billion of Treasury securities will be completed by the end of October 2009."