GOVERNMENT: Fed Looks to Spur Growth by Buying Government Debt

Federal Reserve officials will reinvest principal payments on their mortgage holdings into long-term Treasury securities, the central bank’s first attempt to bolster growth in more than a year.

“The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” the Federal Open Market Committee said in a statement in Washington. “To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level.” The Fed retained a commitment to keep its benchmark interest rate close to zero for an “extended period.”

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