WASHINGTON (7/30/14 UPDATED 2:45 PM ET)--Citing "sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions," the Federal Open Market Committee announced Wednesday it will continue the pace of its quantitative easing program.
The announcement came at the conclusion of the FOMC's two-day policy meeting this week.
Beginning in August, the committee will add to its holdings of agency mortgage-backed securities at a pace of $10 billion per month rather than $15 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $15 billion per month rather than $20 billion per month.
Previously, the Federal Reserve's monetary policy-making body has been shaving down the amount of bonds and securities it has been buying over the last few months--purchases that have injected much-needed cash into the lending industry and subsequently the economy--by $10 billion every month (News Now June 18).
The committee said growth in economic activity rebounded in the second quarter. While the labor market conditions improved, with the unemployment rate declining further, a range indicators show that some labor resources remain underutilized the committee said.
Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has moved somewhat closer to the committee's long-term objective. Longer-term inflation expectations have remained stable.
The Fed said it, "judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat."