The Federal Reserve announced that it will conclude the reduction of its aggregate securities holdings on December 1.
The statement noted that “available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.”
In addition, the Fed lowered the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent.
In a separate announcement, the New York Fed announced that its desk will roll over at auction all principal payments from the Federal Reserve’s holdings of Treasury securities and reinvest into Treasury bills through secondary market purchases.
Rollovers of principal payments from maturing Treasury securities will continue to be reinvested in new Treasury securities being issued on the maturity date. Rollovers will continue to be accomplished by placing non-competitive bids at Treasury auctions; the bids will be allocated across the securities being issued on each auction date in proportion to their announced offering amounts.