Fed to Spend $600 Billion More To Help Boost US Economy

It said holdings would be allowed to rise above that threshold "only in modest increments." Including the Fed's ongoing plan to reinvest maturing assets, the New York Fed expects to conduct $850 billion to $900 billion in Treasury purchases through the end of the second quarter of 2011

The central bank had already cut overnight interest rates to near zero in December 2008 and bought about $1.7 trillion in U.S. government debt and mortgage-linked bonds.

Some worry further bond buying could do more harm than good by providing tinder for inflation that will ignite when the recovery finally gains traction.

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