No change in rates, longer term inflation in check, and low level of interest rates for an extended period of time.  They will also continue to buy Treasuries and MBS.  Market are volatile but holding, albeit at lower levels.   MBS off 9/32’s


Release Date: September 23, 2009

For immediate release

Information received since the Federal Open Market Committee met in August suggests that

economic activity has picked up following its severe downturn.  Conditions in financial markets

have improved further, and activity in the housing sector has increased.  Household spending

seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth,

lower housing wealth, and tight credit.  Businesses are still cutting back on fixed investment and

staffing, though at a slower pace; they continue to make progress in bringing inventory stocks

into better alignment with sales.  Although economic activity is likely to remain weak for a time,

the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal

and monetary stimulus, and market forces will support a strengthening of economic growth and a

gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term

inflation expectations stable, the Committee expects that inflation will remain subdued for some


In these circumstances, the Federal Reserve will continue to employ a wide range of 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.  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 $1.25 trillion of

agency mortgage-backed securities and up to $200 billion of agency debt.  The Committee will

gradually slow the pace of these purchases in order to promote a smooth transition in markets and

anticipates that they will be executed by the end of the first quarter of 2010.  As previously

announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be

completed by the end of October 2009.  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.