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Fed to keep buying bonds

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Fed to keep buying bonds

Fed to keep buying bonds
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The US Federal Reserve is sticking to its bond-buying stimulus programme despite some signs of firmer growth in the world’s largest economy.

Fed chief Ben Bernanke and the policymakers at the US central bank will not make any changes to their current plans to buy $40 billion worth of mortgage debt each month.

The Fed has targeted housing as a channel to boost growth and its purchases have helped push already low mortgage rates even lower.

That policy may be working as new US single-family home sales surged in September to the highest level in nearly two and half years.

Modest job gains, increased job security and the record low mortgage rates are encouraging many to seek home ownership.

The average rate on a 30-year fixed mortgage is now 3.36 percent — the lowest since 1971.

Fed policymakers have said they would continue their open-ended plans to buy bonds until the employment outlook improves substantially.