Fed to Spend $40B a Month on Bond Purchases

WASHINGON (AP) – The Federal Reserve says it will spend $40 billion a month to purchase mortgage-backed securities because the economy is too weak to reduce high unemployment. The Fed says it will keep buying more bonds until the job market shows substantial improvement. The Fed also extended a plan to keep short-term interest rates at record-low levels through mid-2015. Both steps were announced after the Fed’s two-day policy meeting Thursday.