Saying that "economic activity has picked up following its severe downturn," the Federal Reserve today announced it was keeping interest rates unchanged in order to preserve price stability and promote the economic recovery.
The target federal funds rate, the one banks use when lending to each other, will remain at 0 to .25%.
"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," the Fed's Open Market Committee said in a statement explaining it decision following a two-day meeting.
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The committee also announced that to support 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.
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