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Press Release

Release Date: June 24, 2009
For immediate release
Information received since the Federal Open Market Committee met in April suggests that the pace
of economic contraction is slowing. Conditions in financial markets have generally improved in
recent months. Household spending has shown further signs of stabilizing but remains constrained
by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed
investment and staffing but appear to be making progress in bringing inventory stocks into better
alignment with sales. Although economic activity is likely to remain weak for a time, the
Committee continues to anticipate that policy actions to stabilize financial markets and institutions,
fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of
sustainable economic growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack
is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued
for some time.
In these circumstances, the Federal Reserve will employ all available tools to promote economic
recovery and to preserve price stability. The Committee will maintain the target range for the
federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely
to warrant exceptionally low levels of the federal funds rate for an extended period. As previously
announced, to provide support to mortgage lending and housing markets and to improve overall
conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion
of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year.
In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The
Committee will continue to evaluate the timing and overall amounts of its purchases of securities
in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve
is monitoring the size and composition of its balance sheet and will make adjustments to its credit
and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C.
Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M.
Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102