The decision to maintain its stimulus follows reports of sluggish economic growth. Employers slowed hiring this summer, and consumers spent more cautiously.
Super-low rates are credited with helping fuel a housing comeback, support economic growth, drive stocks to record highs and restore the wealth of many Americans. But the average rate on the 30-year mortgage has jumped more than a full percentage point since May and was 4.57 percent last week — just below the two-year high.
Investors had bid up those loan rates on expectations that the Fed would reduce its stimulus as early as this month.
John Canally, investment strategist at LPL Financial, suggested that financial markets had overreacted in anticipation of reduced bond purchases.