Fed Feeds Expectations, Maintains Economic Stimulus

NEW YORK (TheStreet) -- The Federal Reserve will maintain its $85 billion in monthly asset purchases, the central bank said in its policy-making statement on Wednesday.

The decision to continue purchasing $40 billion in mortgage-backed securities and $45 billion in longer-term Treasuries failed to surprise investors, as economists and analysts had anticipated no change from the central bank following a weak September jobs report and the government shutdown.

A survey by Bloomberg data showed that economists weren't expecting the Fed to begin so-called tapering, when the bank would reduce the amount of asset-backed purchases it makes each month.

The Federal Reserve, as anticipated, continued to keep the short-term federal funds rate at a range of zero to 0.25%, which has remained unchanged since late 2008.

Below is the full text of the statement:

Information received since the Federal Open Market Committee met in September generally suggests that economic activity has continued to expand at a moderate pace. Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated. Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.

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