Release Date: June 24, 2009
For immediate release
Information received since the Federal Open Market Committee met in April suggests that the pace of
economic contraction is slowing. Conditions in financial markets have generally improved in recent
months. Household spending has shown further signs of stabilizing but remains constrained by
ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed
investment and staffing but appear to be making progress in bringing inventory stocks into better
alignment with sales. Although economic activity is likely to remain weak for a time, the Committee
continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and
monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic
growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack is
likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for
some time.
In these circumstances, the Federal Reserve will employ all available tools to promote economic
recovery and to preserve price stability. The Committee will maintain the target range for the federal
funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant
exceptionally low levels of the federal funds rate for an extended period. As previously announced, to
provide support to mortgage lending and housing markets and to improve overall conditions in private
credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-
backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal
Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to
evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic
outlook and conditions in financial markets. The Federal Reserve is monitoring the size and
composition of its balance sheet and will make adjustments to its credit and liquidity programs as
warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley,
Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P.
Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
2009 Monetary Policy Releases
