The Federal Reserve Wednesday unveiled a controversial new plan to buy U.S. Treasurys, hoping to spur growth in a disappointingly slow U.S. economy.
After two days of discussions, Fed officials decided to go ahead with a much anticipated program, saying they will buy $600 billion of U.S. government debt over the next eight months.
The Fed’s policy-setting body said it stands ready to purchase more bonds if the economy’s persistent weakness leads inflation to remain too low and unemployment too high.
The Fed’s first $1.75 trillion bond-buying program, which ran from Dec. 2008 to March 2010, is credited with helping the economy when the U.S. was hit by a financial crisis and a deep recession. The latest move is more controversial because the economy is now growing — albeit slowly — and financial markets are no longer under severe stress.