"Without an end date, the committee may have to alter the pace of purchases as news arrives concerning U.S. macroeconomic performance"
- Federal Reserve Bank of St. Louis President James Bullard
The U.S. Federal Reserve is likely to maintain its bond-buying programme at least until the end of this year in order to foster economic expansion. According to Federal Reserve Bank of St. Louis President James Bullard, the Fed should adjust its $85 billion in monthly bond buying to account for changes in the economic outlook. As the U.S. economy is on the mend, and there is an improvement both in the labour and property market, the Federal Reserve is expected to consider raising interest rates by June 2014. The latest minutes by the Fed showed that there will be no changes in policies until the unemployment rate falls to 6.5% or inflation rises to 2.5%.
"Without an end date, the committee may have to alter the pace of purchases as news arrives concerning U.S. macroeconomic performance," Bullard said today to the Center for Global Economy and Business at New York University's Stern School of Business.
"The committee should acknowledge gradual improvement when we see it, when we think we see it," Bullard added, "and gradually taper back the program. It's true that the committee is thinking about how we are going to handle this later this year. But that's a natural thing for the committee to be talking about."
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