FOMC: The Bond Taper Is Officially Not Here
After a lengthy amount of chatter and speculation, the long-awaited statement from the world’s most powerful central bank is here.
The Federal Open Market Committee, which is the arm of the U.S. Federal Reserve responsible for open market operations, concluded its two-day meeting Wednesday afternoon. Most people were expecting the Federal Reserve to dial down its bond-purchasing programs, but that’s not what the central bank delivered. Monthly bond purchases will continue as normal, with $40 billion in agency mortgage-backed securities and $45 billion in long-term Treasuries. Most economists and analysts expected a monthly bond taper of about $10 billion to $20 billion.
The FOMC statement says: “Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”