September 22–23, 2009 FOMC Minutes

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The minutes are consistent with the statement because both documents convey the same key assessments and policy decisions: economic activity has picked up from its severe downturn, financial markets have improved, housing activity has increased, household spending is stabilizing but constrained by weak labor and credit conditions, and businesses are cutting back at a slower pace. Both also agree that inflation will remain subdued due to resource slack and stable inflation expectations, and that the federal funds rate will stay at 0 to 1/4 percent for an extended period, with the Fed purchasing $1.25 trillion in agency MBS and up to $200 billion in agency debt, gradually slowing these purchases and completing them by the end of the first quarter of 2010. The minutes elaborate on these points with detailed participant discussions, but they do not contradict the statement's content or policy stance.

FOMC minutes

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 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 up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve's purchases of $300 billion of Treasury securities will be completed by the end of October 2009. 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 this action: Messrs. Bernanke and Dudley, Ms. Duke, Messrs. Evans, Kohn, Lacker, Lockhart, Tarullo, and Warsh, and Ms. Yellen.

Voting against this action: None.

It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, November 3-4, 2009. The meeting adjourned at 12:35 p.m. on September 23, 2009.