Fed Cut Back Bond Buying
The Federal Reserve is expected today to further reduce its stimulus for the U.S. economy even though that prospect has unsettled global financial markets.
January 29, 2013
WASHINGTON (AP) - The Federal Reserve is expected today to further reduce its stimulus for the U.S. economy even though that prospect has unsettled global financial markets.
The Fed announced last month that it would pare its monthly bond purchases from $85 billion to $75 billion. And it said that if the economy kept improving, it would likely further slow its bond buying at future meetings. The Fed's bond purchases have been intended to keep long-term loan rates low to spur spending and economic growth.
Most economists expect a string of $10 billion monthly reductions in bond purchases to be announced at each Fed meeting this year, concluding with a final $15 billion cut in December.
The two-day Fed meeting that ends today will be the last to be presided over by Ben Bernanke, who is stepping down after eight years as chairman and will be succeeded next week by Vice Chair Janet Yellen. She is expected to stick closely with Bernanke's policies.