The Federal Reserve said it will expand its holdings oflong-term securities with open-ended purchases of $40 billion ofmortgage debt a month in a bid to boost growth and reduceunemployment.

“If the outlook for the labor market does not improvesubstantially, the committee will continue its purchases of agencymortgage-backed securities, undertake additional asset purchasesand employ its other policy tools as appropriate,” the Federal OpenMarket Committee said today in a statement at the end of a two-daymeeting in Washington.

The FOMC said it would likely hold the federal funds rate nearzero “at least through mid-2015.” Since January, the Fed had saidthe rate was likely to stay low at least through late 2014. The Fedsaid “a highly accommodative stance of monetary policy will remainappropriate for a considerable time after the economic recoverystrengthens.”