Fed backs plan to taper $10bn every month
THE FEDERAL Reserve has confirmed its intention to trim the US quantitative easing (QE) programme by $10bn (£5.98bn) each month, according to official minutes released yesterday.
The details of Janet Yellen’s first meeting as chair of the Fed makes official the “clear presumption” that QE will be tapered at the same pace, unless there is an major change in the economy.
Two hawkish board members, Richard Fisher and Charles Plosser, objected to the extension of a relatively minor reverse repurchase operation, by which the Fed promises to buy back securities it has sold to investors.
The board cited January’s bad weather as a major factor in poor economic data.
“Only if the weaker data continued into the spring, when it would be harder to blame the weather, would we expect the committee to consider putting the taper on hold,” said Paul Ashworth of Capital Economics.