Fed to Continue Stimulus Effort

The Federal Reserve will continue buying $85 billion a month in bonds in an effort to spur economic growth, officials announced on Wednesday. It was a surprise move, as many analysts thought the Fed would be ending its stimulus campaign. But with another showdown over government spending looming, the Fed felt that fiscal policy was hampering the economy and that tapering off its bond purchases would threaten the recovery. The Fed also decided to keep short-term interest rates near zero. The news rallied investors on Wall Street as both the S&P 500 and Dow Jones industrials hit new all-time-high records. The S&P reached 1,709.67 after the announcement.