According to the minutes of the September 12-13 Federal Open Market Committee meeting, most members agreed that the directive to begin purchasing agency mortgage-backed securities at a pace of about $40 billion per month could be preferable to purchasing Treasury securities because they would more directly support the housing sector, which remains weak but has shown some signs of improvement of late.

At the conclusion of the discussion, the committee also authorized keeping the target range for the federal funds rate at 0 to 0.25%.
The committee said it would continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of six years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately three years or less with a total face value of about $267 billion.

The committee also agreed to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. It also directed to begin purchasing agency mortgage-backed securities at a pace of about $40 billion per month.

To read the FOMC minutes, click here.