WASHINGTON, Sept. 21 (Xinhua) -- The U.S. Federal Reserve announced Wednesday the extension of average maturity of its 400- billion-dollar holdings of government securities to boost economy.
"To support a stronger economic recovery... The Committee intends to purchase, by the end of June 2012, 400 billion dollars of Treasury securities with remaining maturities of 6 years to 30 years," the central bank said in a statement released after a two- day meeting of the Federal Open Market Committee (FOMC), its interest rate policy making body.
Based on information collected since FOMC's last meeting in August, "economic growth remains slow," said the Fed.
"Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated," noted the Fed.
The Fed said that it continued to expect some pickup in the pace of recovery over coming quarters but anticipated that the unemployment rate will decline only gradually.
Moreover, "there are significant downside risks to the economic outlook, including strains in global financial markets."
The Committee, meanwhile, kept its key interest rate target at the historic low level of 0-0.25 percent. Besides, it decided to extend the maturity of its holdings of Treasury bonds. This action is considered as a new policy to spur the sluggish economy.
The Fed said that "this program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative."
The Fed's stimulus measure comes at a time when world economy is at a critical moment.
Global economy has entered into "a dangerous new phase," according to the International Monetary Fund (IMF), which is scheduled to officially kick off its annual meetings on Thursday.
The 187-member international lending institution cut its projections of the U.S. economic growth to 1.5 percent and 1.8 percent this year and in 2012 respectively.