Federal Reserve officials highlighted signs of economic recovery and unveiled a strategy for reining in one of the central bank's extraordinary measures to prop up the mortgage market. The Fed's policy-setting panel announced that it would extend its $1.25 trillion of purchases of mortgage-backed securities into next year in order to help financial markets adjust.

The Federal Open Market Committee voted 10-0 to maintain the target federal-funds rate for interbank lending at a record-low range of zero to 0.25%. "Economic activity has picked up following its severe downturn," the Fed said in the upbeat policy statement it released at the conclusion of its two-day policy meeting.