Fed sees signs of recovery

Charlotte Business Journal

Federal Reserve policymakers have ended their two-day meeting on interest rates leaving rates unchanged, indicating they will stay low for a while longer.

In addition, they will slow the pace of the program to buy $300 billion in U.S. Treasuries.

“To promote a smooth transition in markets as these purchases of Treasury securities are completed, the committee has decided to gradually slow the pace of these transactions and anticipates the full amount will be purchased by October,” policymakers said in a statement.

That would be one month later than the Treasury purchase program was originally scheduled to end.

The Fed’s benchmark interest rate remains at 0 to 0.25 percent.

“Information received since the Federal Open Market Committee met in June suggests that economic activity is leveling out,” the Fed’s statement said. “Conditions in financial markets have improved further in recent weeks.”

The Fed also noted significant challenges remain, citing constrained household spending, sluggish income growth, lower housing wealth and tight credit. And it says businesses continue to cut back on fixed investment and staffing, while making progress in bringing inventory into better alignment with sales.

The Federal Reserve did not alter its plan to buy up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year, a key part of its efforts to improve conditions in private credit markets.