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Interest rates: Fed sticks with $600 billion plan to lower interest rates

Interest rates and ongoing unemployment keep Federal Reserve officials firm in their plan to buy back $600 billion in Treasury bonds.

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Federal Reserve Chairman Ben Bernanke listens during a Nov. 23 meeting at the Treasury Department in Washington. Fed officials announced Tuesday that they would stand by their plan to buy back $600 billion in Treasury bonds, in order to lower interest rates and stimulate the economy.

Susan Walsh / AP / File

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Federal Reserve officials stuck with the pace of their $600 billion Treasury bond-buying program last month because the U.S. economy wasn't improving fast enough to make a noticeable dent in unemployment.

Spending by consumers and businesses had improved heading into the final month of 2010, and Congress was on the verge of enacting a tax-cut package that would bolster the economy, Fed officials said. That made them more confident the economic recovery would gain momentum, according to minutes of the Fed's closed door meeting on Dec. 14.

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Risks still loomed, the minutes said, particularly a weak housing market and spending cuts and layoffs from state and local governments. So the Fed voted 10-1 to stick with its plan to buy the bonds through June to try to lower interest rates, spur spending and lift stock prices.