Fed Maintains $85 Billion Pace of Purchases as Growth
Pauses
“Although strains in
global financial markets have eased somewhat, the committee continues to
see downside risks to the economic outlook,” the FOMC said.
The purchases will remain
divided between $40 billion a month of mortgage-backed securities and $45
billion a month of Treasury
securities. The central bank also will continue reinvesting any
Treasury securities that mature and will reinvest its portfolio of maturing
housing debt into agency mortgage-backed securities.
The Fed repeated that the
purchases will continue “if the outlook for the labor market does not
improve substantially.”
Kansas City Fed President
Esther George dissented from the statement, saying she was
concerned that -
“the continued high level
of monetary accommodation increases the risks of future economic and financial
imbalances and, over time, could cause an increase in long-term inflation
expectations.”
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