WASHINGTON — Federal Reserve policymakers left the federal funds rate near zero and said the economy is continuing to improve but indicated that they still view the recovery as sufficiently fragile that they will keep rates low for some time.
Following a two-day meeting, the Federal Open Market Committee on Wednesday afternoon said that information received since its last meeting “suggests that economic activity has continued to pick up” and that “household spending appears to be expanding” even as it remains constrained by the weak job market and other factors.
As was widely expected, the Fed left its target for the federal funds rate, at which banks lend to one another, in a range of zero to 0.25 percentage points.
It also repeated language in its statement that it expects economic conditions to “warrant exceptionally low levels of the federal funds rate for an extended period.”
One surprise was that the Fed reduced a previously announced program to buy debt of government housing-finance companies such as Fannie Mae and Freddie Mac.
After long stating it would buy up to $200 billion in those firms’ debt in an effort to push down interest rates more broadly, the statement said those purchases will now total about $175 billion, in part because of “the limited availability of agency debt.”
The economy grew at a 3.5 percent annual rate in the third quarter, as measured by gross domestic product, but much of that was growth led by boosts from government policies and business-inventory decisions that may not be sustained in future quarters.
