The 15-Second Fed: Instant Insight

NEW YORK (TheStreet) -- After two days of meetings by the Federal Reserve Open Market Committee, the Fed issued a statement on the state of the economy. If you're not into reading "Fed speak," here's a quick and dirty digest of the important bullet points.

The Big Number: 0% to 0.25%. Once again, and to precisely no one's surprise, Fed policymakers left key interest rates untouched at record lows as any economic recovery remains nascent and fragile.

The Big Line: OK, there are two of them. "Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn." And: "With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time."

With the statement's first sentence, the Fed has turned the outlook knob ever so slightly in a more-positive direction, upgrading its sentiment from last month, when policymakers said they saw a "leveling out" of the economy. Now, it's "picked up."

In the second Big Line, the Fed appears to register some concern about deflation, though it stopped well short of using that freighted word. Note especially the clause "substantial resource slack."

New News: The Fed extended its own deadline for completing the purchase of some $1.45 trillion in mortgage-backed debt and other toxic securities issued by Fannie Mae and Freddie Mac. The Fed had said it hoped to finish the buying by the end of the year. Now, it says, the end of the first quarter of 2010 is the likely quit date.

The Takeaway: The extended deadline of the Fed's purchasing program would appear to mean that central bankers, while cautiously optimistic, to use a hackneyed phrase, are still extremely wary of pulling the plug too soon on a policy that's meant to open and intensify the currents of credit and, thus, usher the nation toward economic recovery.

-- Written by Scott Eden in New York

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