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Fed winding down Treasury purchases

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The Federal Reserve will continue a program to purchase up to $1.25 trillion in mortgage-backed securities by the end of the year to keep mortgage rates down, but will wind down $300 billion in purchases of Treasury securities by the end of October.The Fed had planned to wrap up its purchases of Treasury securities in September but will instead "gradually slow the pace" of purchases to "promote a smooth transition in markets" as the program reaches its $300 billion limit. The purchases have helped keep interest rates low but have raised concerns that the government is in effect "printing money" and raising the long-term risks for inflation.In an announcement, the Federal Open Market Committee also said it expects inflation "will remain subdued for some time," and that its target for the federal funds rate will remain at zero to 0.25 percent. The federal funds rate is the rate at which banks lend each other money overnight, which the Fed can infl...