The Federal Reserve met market expectations Wednesday with another round of easing, this time with a pledge to keep interest rates low until unemployment falls below 6.5 percent and inflation tops 2.5 percent.
Economists had been expecting the Federal Reserve to accelerate its debt buying program, known as quantitative easing, to the tune of another $45 billion a month, and the central bank came through.
Coupled with its move to buy $40 billion of mortgage-backed securities a month, that would bring the Fed balance sheet expansion to another trillion dollars or so in 2013 and $4 trillion overall.
The move essentially keeps the Fed in the easing business indefinitely, as the jobless rate has been stubbornly high for the past four years and shows little inclination lower except for statistical gyrations caused by people leaving the workforce.
In its statement, the Fed’s Open Market Committee said the economy is growing gradually but needs assistance in the form of the dual measures it agreed to at its final meeting of 2012.