Federal Reserve policy makers cut the pace of bond buying
for a second straight meeting, uniting behind a strategy of gradual withdrawal
from Ben S. Bernanke’s unprecedented easing policy as Janet Yellen prepares to
succeed him as chairman.
The Federal Open Market Committee said it will trim monthly
purchases by $10 billion to $65 billion, citing labor-market indicators that
“were mixed but on balance showed further improvement” and economic growth that
has “picked up in recent quarters.”
It was the first meeting without a dissent since June 2011,
showing the tapering strategy has brought together policy makers concerned the
Fed’s record $4.1 trillion balance sheet risks causing asset price bubbles with
those who, like Vice Chairman Yellen, say more needs to be done to reduce
unemployment.
Policy makers pressed on with a reduction in the purchases,
put in place to speed a recovery from the worst recession since the Great
Depression, even after payroll growth slowed in December and amid a rout in
emerging-market currencies.
The Fed left unchanged its statement that it will probably
hold its target interest rate near zero “well past the time” that unemployment
falls below 6.5 percent, “especially if projected inflation” remains below the
committee’s longer-run goal of 2 percent. Stocks remained lower and Treasuries
gained.
(Source: bloomberg)