Fed Holds Rates Steady, Says Economy 'Picked Up'

The Federal Reserve today decided as expected to hold a key bank lending rate at a record low near zero and pledged to keep rates there "for an extended period." The Fed also declared that "economic activity has picked up following its severe downturn" and said it would slow the pace of a program to lower mortgage rates and prop up the housing market.  

The Fed says it will stretch out its goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac, and Ginnie Mae until the end of the first quarter of 2010. Originally, the central bank intended to complete buying those securities by the end of this year. (More Federal Reserve stories.)