Fed Attempts to Jump-Start the Economy

The Federal Reserve ended its do-little policy on Thursday, pledging to keep interest rates near zero and announcing an open-ended commitment to buy bonds and possibly take other steps to push the economy into motion.

—Posted by Alexander Reed Kelly.

The New York Times:

The Fed said that it would add $23 billion of mortgage bonds to its portfolio by the end of September and then announce its plans for October as part of a new process that aims to prioritize the Fed’s economic objectives.

The Fed also said, in a statement following a meeting of its policy-making committee, that it now expects to hold short-term interest rates near zero until at least mid-2015, extending the forecast it made in January by about half a year.

The statement said that the economy had continued to expand “at a moderate pace,” but that the Fed had concluded “growth might not be strong enough to generate sustained improvement in labor market conditions.”

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Medill DC (CC BY 2.0)

Federal Reserve Chairman Ben Bernanke.