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Yesterday Wednesday January 25, 2011

12:34 PM ET – The Fed will continue to reinvest principal from mortgage related debt and continue to purchase mortgage bonds.

12:31 PM ET – Fed says inflation will run at levels at or below those consistent with mandate.

12:28 PM ET – Fed keeps interest rates low and will do so through late 2014.

The meetings decision was made in part to support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September.

The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.

The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate. 2012 Monetary Policy Releases

What does this all mean?  Low interest rates to keep helping in spurring the economy with hopes that buyers will continue to buy homes and grow the economy back to 2003 levels.

Bank Rate today is 1/26/2012  3.92 for 30 year mortgage