Fed holds on Treasury issue, flags deflation risk

The Federal Open Market Committee (FOMC) said that it could buy longer-term Treasury securities, but only if market conditions were right. The committee also acknowledged that inflation may fall to "below rates that best foster growth and stability".

The FOMC said it was "prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets." The purpose of Treasury purch