The FOMC statement said that economic activity is “leveling out,” an improvement from the “pace of economic contraction is slowing” that was said at the June meeting. The rest of the paragraph on the economy was very similar to the June meeting. The commentary on inflation is about identical to the previous one as they believe due to a still substantial output gap, “inflation will remain subdued for some time,” notwithstanding the rise in energy and other commodity prices. With respect to policy, the fed funds will remain at “exceptionally low levels… for an extended period.” The buying of MBS and agency paper will continue. The only change in the plan to buy Treasuries is that they will gradually slow the buying process and spread it out until the end of October. The total amount will still be $300b but it clarifies the time frame as they gave ‘Autumn’ as a deadline in June.

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