Wednesday, December 12, 2012 6:41 PM / WSJ
The Federal Reserve refashioned its bond-buying programs, extending its far-reaching effort to revitalize the jobs market and boost the economic recovery into 2013.
In its final meeting of the year, the central bank's policy committee said it would "initially" begin buying $45 billion of long-term Treasury bonds each month. The latest stimulus from the Fed will replace an expiring program known as "Operation Twist," in which the Fed has been buying about $45 billion of long-term Treasury bonds each month and selling about the same amount of short-term Treasurys.
In a surprise, the Fed adopted thresholds on unemployment and inflation to guide the market on when it plans to raise the fed funds rate.
The Fed said it would hold rates close to zero while the unemployment rate is above 6.5% as long as inflation does not rise above 2.5%.
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