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Press Release

Release Date: November 4, 2009
For immediate release
Information received since the Federal Open Market Committee met in September suggests that
economic activity has continued to pick up. Conditions in financial markets were roughly
unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased
over recent months. Household spending appears to be expanding but remains constrained by
ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are
still cutting back on fixed investment and staffing, though at a slower pace; they continue to make
progress in bringing inventory stocks into better alignment with sales. Although economic activity
is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize
financial markets and institutions, fiscal and monetary stimulus, and market forces will support a
strengthening of economic growth and a gradual return to higher levels of resource utilization in a
context of price stability.
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
In these circumstances, the Federal Reserve will continue to employ a wide range of 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, including low rates of resource utilization, subdued inflation trends, and stable inflation
expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended
period. 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 $1.25 trillion of
agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency
debt purchases, while somewhat less than the previously announced maximum of $200 billion, is
consistent with the recent path of purchases and reflects the limited availability of agency debt. In
order to promote a smooth transition in markets, the Committee will gradually slow the pace of its
purchases of both agency debt and agency mortgage-backed securities and anticipates that these
transactions will be executed by the end of the first quarter of 2010. 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.