The Federal Open Market Committee (FOMC) has said that it is still evaluating a strategy that has lowered longer-term mortgage rates and has noted some slowing in the financial system's contraction, but it added that it currently considers economic woes remain bad enough to keep the shorter-term fed funds rate low for some time.

"Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit," the FOMC said.

The committee said Wednesday afternoon it would "continue to evaluate the timing and overall amounts of its purchases of securities," including agency MBS, "in light of the evolving economic outlook and conditions in financial markets."

It also said it would "maintain the target range for the federal funds rate at 0 to 1/4% and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

The 10-year Treasury yield had risen above 3% Wednesday morning but then had started to trend downward Wednesday afternoon.

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