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Fed Steps Up Efforts to Stimulate Job Growth
The Federal Reserve has decided to increase its bond-buying program to spur acceleration of the U.S. economy and job market.
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The Federal Reserve has decided to increase its bond-buying program to spur acceleration of the U.S. economy and job market.
The Fed, which has been buying $40 billion of mortgage-backed securities per month since September, will add monthly purchases of $45 billion of government bonds. The central bank also will continue the bond program into 2013.
The Fed says it will hold its key overnight lending rate in the current range of zero to 0.25% until the American jobless rate drops to 6.5% which it says could take until 2015. The unemployment rate was 7.7% in November.
The central bank adds that it would consider raising interest rate levels sooner only if inflation surges beyond its 2% target.
It was the first time the Fed has publicly tied its policy to a specific unemployment level. Chairman Ben Bernanke says the move is meant as an "automatic stabilizer" that will reduce financial market uncertainty by telegraphing the Fed's interest-rate plans as employment data are reported.
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