WASHINGTON (AP) -- With the economy on the mend, the Federal Reserve on Wednesday said it is slowing the pace of a program to lower mortgage rates and prop up the housing market.

The Fed decided to stretch out its goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae until the end of the first quarter of 2010. Originally, the central bank intended to complete buying those securities by the end of this year.

It marked the second time since August that the Fed has opted to slow some of its extraordinary support to revive the economy and spur Americans to boost spending. It shows that the Fed Chairman Ben Bernanke and his colleagues are confident the recovery will take hold.

In a more upbeat assessment, the Fed said: "Economic activity has picked up following its severe downturn." When the Fed last met in August, policymakers declared that economic activity was "leveling out."

The central bank also "expects that inflation will remain subdued for some time."

Even though the Fed will stretch out its purchases of mortgage securities, rates for home loans should remain low "in the 5 percent range" as long as the purchases continue, said Guy Cecala, publisher of Inside Mortgage Finance.

On Wall Street, stocks rose on the Fed's more optimistic outlook. The Dow Jones industrial average, which

It's 12 months later and Warren Buffett's Berkshire Hathaway is $3 billion richer.

One year ago today, on September 23, 2008, with the financial world still reeling from the collapse of Lehman Brothers just days before, Buffett stunned Wall Street with a massive vote of confidence for Goldman Sachs.

In a late-day news release, Goldman announced a private deal to sell Berkshire $5 billion of perpetual preferred stock. In effect, Berkshire was giving Goldman a massive loan. And you don't loan that kind of money to a firm you think could follow Lehman down the drain.

In that release, Buffett called Goldman "an exceptional institution" with an "unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."

The next day, in an interview on CNBC, Buffett said, "The price was right, the terms were right, and the people were right."

Buffett's money, and his endorsement of Goldman, didn't come cheap.

Goldman agreed to pay Berkshire a 10 percent annual dividend on the preferred stock. That's $500 million