The Federal Reserve said today that the US economy was in recovery and repeated its intention to keep rates exceptionally low for some time.
"Information received since the Federal Open Market committee met in August suggests that economic activity has picked up following its severe downturn," the Fed said in a statement. As was widely expected it said it was holding overnight lending rates at close to 0%.
The Fed added that it would gradually slow the pace of its purchases of mortgage-related debt in order to promote a smooth transition in markets, but reiterated it would keep its options open.
It doubled the size of its balance sheet to around $2tn as it flooded financial markets with money during the crisis last year. It has maintained this support through a campaign to buy $300bn of longer dated US government bonds and $1.45tn of mortgage-related debt in an effort to keep lending rates low.
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