Wednesday, December 18, 2013
The main question is whether or not the Fed will begin tappering its current bond buying policy which has been in place since 2008. NPR did a quick and accessible print and radio story on the Fed and the issue of tappering. Both versions of the story are available here. I've also posted on this blog before on the issues facing the Fed as leadership is about to change hands.
Watch it live at 2:30 pm today here.
[editted today at 3:15]-- Summary of Fed Policy Announcements:
- Fed will reduce (tapper) its bond buying program from $85 billion to $75 billion per month, with additional tapering expected as the economy continues to strengthen.
- The policy at the Fed is dependent, in part, upon the rate of inflation, which has been running below the 2% benchmark. “The [Fed] recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward it objective over the medium term.”
- Short-term interest rates are expected to hold steady through 2014 with some anticipated increase in 2015, especially if the unemployment rate falls below 6.5% (as it is expected to do in 2014).
- Today’s announcements are consistent with the policy outlined in the September meeting of the Fed, and indicate a gradually strengthening economy with a rising gross domestic product and falling jobless rate.