Summary Box: Fed Says Economy Is Picking Up

IMPROVING PICTURE: Federal Reserve policymakers upgraded their view of the economy, saying "economic activity has picked up."

SLOWING SOME SUPPORT: The Fed decided to stretch out a program intended to lower mortgage rates and prop up the housing market. It says it will complete its $1.45 trillion program to buy mortgage-backed securities and debt by the end of March, rather than the end of this year. That follows a decision in August to slow a government debt-buying program, which aims to lower rates on home mortgages and other consumer debt.

HIGH-WIRE ACT: As the economy gains traction, the Fed will come under more pressure to wind down the emergency support, which has caused its balance sheet to jump to $2 trillion. Timing is tricky. Fed policymakers need to leave the special programs intact long enough to support the recovery — but not so long as to unleash inflation later on.

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