The Federal Reserve will take steps to bolster the economy until the jobless rate falls to 6.5 percent or inflation looks likely to exceed 2.5 percent, the central bank said Wednesday in a historic move that for the first time specifies the Fed's goals for the economy.
The Fed also said it would buy $45 billion in Treasury bonds a month, on top of $40 billion a month it is already buying in mortgage bonds, in an effort to flood markets with money and reduce interest rates on a wide range of loans. Lower interest rates tend to stimulate borrowing, economic activity and jobs.
The actions signaled the Fed's concerns that high unemployment — what Fed Chairman Ben Bernanke called "an enormous waste of human and economic potential" — will cast a long shadow over the nation for years. Fed officials projected that the jobless rate, now at 7.7 percent, would not reach 6.5 percent until near the end of 2015 at the earliest.