The Federal Reserve just released its FOMC statement for it October meeting, noting that the Fed will continue its bond-buying stimulus program despite signs that the economy is improving. This was universally expected, especially in view of upcoming budget and debt-limit showdowns in Congress.
” … the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.
“Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate. “
The Fed also noted that the current rate of inflation (just 1.2% over the last 12 months) is below its target of 2%.
“The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.”
Yes, the purchase limit is not affected by an I Bond redemption. It remains $10,000 per person per year.