The Federal Open Market Committee said Wednesday it will continue buying mortgage-backed securities at a pace of $40 billion a month since the economic recovery is too moderate to produce jobs growth at this point.

The committee also said it would keep the target range for the federal runds rate between zero and one-fourth percent.

Housing data has improved, but the upticks in activity are compared to depressed levels. Inflation also picked up with consumers seeing higher energy prices, FOMC said.

“The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the FOMC said in its latest statement.

The announcement shows little change in current policy.

“The December 11-12 meeting will be much more interesting,” said Goldman Sachs (GS) chief economist Jan Hatzius. “We expect the QE program to expand from $40bn per month now to $85bn per month from January, in order to keep the pace of asset purchases constant even after the completion of Operation Twist.”

“A shift to outcome-based forward guidance and/or adoption of an FOMC consensus forecast for the economy are also under discussion, although we are not forecasting either at this point,” he added.

kpanchuk@housingwire.com

Most Popular Articles

FHA loan limits increasing for almost all of U.S. in 2020

Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020.

Dec 05, 2019 By

Latest Articles

HousingWire is growing. Come join us

2019 has been a year of tremendous audience and product growth for HousingWire and we couldn’t be prouder. But we’re not ready to rest on our laurels. Far from it. In fact, 2020 promises to be an even bigger year for HousingWire.

Dec 06, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please