September 18, 2014
WASHINGON (AP) - The Federal Reserve says it will spend $40 billion a month to purchase mortgaged-back securities because the economy is too weak to reduce high unemployment. The Fed says it will keep buying the securities until the job market shows substantial improvement.
The Fed also extended a plan to keep short-term interest rates at record-low levels through mid-2015. Both steps were announced after the Fed's two-day policy meeting.
The bond purchases are intended to lower long-term interest rates to spur borrowing and spending. The Fed has previously bought $2 trillion in Treasury bonds and mortgage-backed securities since the 2008 financial crisis.
Skeptics caution that further bond buying might provide little benefit. Rates are already near record lows. Critics also warn that more bond purchases raise the risk of higher inflation later.
Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Viewers with disabilities can get assistance accessing this station's FCC Public Inspection File by contacting the station with the information listed below. Questions or concerns relating to the accessibility of the FCC's online public file system should be directed to the FCC at 888-225-5322, 888-835-5322 (TTY), or firstname.lastname@example.org.