The Federal Reserve will not sell any of its massive holdings of agency MBS and Treasurys until 2015 as it strives to keep interest rates low, central bank officials said Wednesday afternoon.
"Initial sales from our balance sheet will be later than previously thought – presumably in 2015," Fed chairman Ben Bernanke said at a press briefing Wednesday afternoon.
The Fed chief made his remarks following a two-day meeting of the Federal Open Market Committee (FOMC).
The FOMC issued a statement Wednesday that says it currently looks as if economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least through 2014. Previously, its target was mid-2013.
One committee member, Jeffrey Lacker, voted against the statement, saying he preferred to omit the time period over which economic conditions are likely to warrant the low levels of the fed funds rate.
The Fed currently holds $847.4 billion of Fannie Mae, Freddie Mac, and Ginnie Mae MBS, and $101.5 billion in agency debt.
The FOMC said it will continue its existing policy of reinvesting principal payments from those holdings back into MBS and agency debt.