WASHINGTON (Nov. 3, 2010) — The Federal Reserve's Federal Open Market Committee (FOMC) will buy a further $600 billion worth of longer-term Treasury securities by the second quarter of 2011 to strengthen the economic recovery and ensure a continued low inflation rate, the FOMC announced today.
At the same time, the Fed voted to maintain the federal funds rate—the interest rate at which banks lend to other banks—at zero to ¼ percent, in keeping with continuing low rates of inflation and resource utilization, the committee said in a statement on the Federal Reserve website.
“Consistent with its statutory mandate, the committee seeks to foster maximum employment and price stability,” the statement read. “Although the committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.”
The Fed will purchase Treasury bonds at the rate of $75 billion per month, the FOMC said.