The U.S. Federal Reserve decided on the 23rd to continue maintaining the federal funds rate—the overnight lending rate between commercial banks—at a historically low level of 0% to 0.25%, and reiterated its commitment to using all available tools to promote economic recovery and ensure price stability.
In a statement released after concluding its two-day monetary policy meeting, the Federal Reserve noted that since its August meeting, U.S. economic activity has accelerated, financial market conditions have further improved, the housing market has become more active, and household spending has stabilized. The Federal Reserve indicated that the U.S. economic situation may require maintaining an ultra-low level of
federal funds rate for an extended period.
In addition to keeping the federal funds rate unchanged, the Federal Reserve also announced an adjustment to the implementation timeline of a program aimed at promoting liquidity in the mortgage market. The Federal Reserve, which originally planned to complete the purchase of a total of $1.45 trillion in mortgage-backed securities or debt from mortgage institutions such as Freddie Mac and Fannie Mae by the end of this year, has now extended the completion date of the purchase program to the end of the first quarter of next year.
According to reports, the Federal Reserve has purchased approximately $775 billion in mortgage-backed securities or debt from mortgage institutions to date. Analysts believe that since the total amount of mortgage-backed securities or debt to be purchased remains unchanged, the Federal Reserve's extension of the purchase timeline signifies a reduction in the intensity of support for the mortgage market, reflecting a certain degree of confidence in the sustainability of the U.S. economic recovery.
