As expected, the Federal Reserve made only small changes in its policy statement, holding policy steady and repeating that it expects to hold interest rates low for an extended period
The Fed repeated that it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the feral funds rate for an extended period."
The central bank added that "low rates of resource utilization, subdued inflation trends, and stable inflation expectations" are behind the need for super-low rates.
The Fed said it would purchase less debt from federal housing agencies. The Fed said it would buy $175 billions of agencies debt, down from prior plans to purchase $200 billion. The vote by the committee was unanimous. Economists expect the Fed to hold interest rates close to zero into sometime in 2010. Some see no action at all until 2011.
(Source: Marketwatch.com)
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