Tick Tock Goes the Taper Clock
In a move the surprised no one, the Federal Open Market Committee concluded its October meeting on Wednesday with the decision not to ease its bond-buying program. Like it said in September, the FOMC sees improving economic conditions but “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”
During the meetings, the committee reviews the country’s financial conditions to determine if the economy is operating in a way that will accomplish long-term economic goals. The members of the committee then vote on strategies and policies for implementing its goals. This time around, Federal Reserve Bank of Kansas City President Esther George was the only dissenting voice.
The FOMC release explained that George voted against continuing bond purchases because of concerns “that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
Fed Governor Jeremy Stein was among those voting to continue the asset-purchasing program, but, as he explained during a speech in Frankfurt, Germany, at the end of September, he wants to see the tapering process tied to a steadfast indicator.