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The U.S. Federal Reserve on Wednesday announced a further $10 billion cut to its monthly bond purchases as it stuck to a plan to wind down its monetary stimulus, despite recent turmoil in emerging markets.

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Federal Reserve Cuts Stimulus to $65 Billion a Month

The U.S. Federal Reserve on Wednesday announced a further $10 billion cut to its monthly bond purchases as it stuck to a plan to wind down its monetary stimulus, despite recent turmoil in emerging markets.

Federal Reserve Cuts Stimulus to $65 Billion a Month (Reuters)

The U.S. Federal Reserve on Wednesday announced a further $10 billion cut to its monthly bond purchases as it stuck to a plan to wind down its monetary stimulus, despite recent turmoil in emerging markets. Fed Chairman Ben Bernanke, whose term ends Friday, adjourned his last policy-setting meeting without making any changes to the U.S. central bank’s other main policy plank: its longer-term plan to keep interest rates low. The Fed acknowledged that “economic activity picked up in recent quarters, in a statement after the two-day meeting. It is the second straight meeting in which the Fed decided to reduce its asset purchase plan by $10 billion. Starting in February, the Fed will buy $65 billion in bonds per month, down from $75 billion now. It cut its purchases of U.S. Treasuries and mortgage bonds equally. The decision received unanimous backing from Fed policymakers and suggests the policymakers are uniting as Vice Chair Janet Yellen prepares to succeed Benanke as head of the Fed on Feb. 1.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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Federal Reserve Cuts Stimulus to $65 Billion a Month

Federal Reserve Cuts Stimulus to $65 Billion a Month (Reuters)

The U.S. Federal Reserve on Wednesday announced a further $10 billion cut to its monthly bond purchases as it stuck to a plan to wind down its monetary stimulus, despite recent turmoil in emerging markets. Fed Chairman Ben Bernanke, whose term ends Friday, adjourned his last policy-setting meeting without making any changes to the U.S. central bank’s other main policy plank: its longer-term plan to keep interest rates low. The Fed acknowledged that “economic activity picked up in recent quarters, in a statement after the two-day meeting. It is the second straight meeting in which the Fed decided to reduce its asset purchase plan by $10 billion. Starting in February, the Fed will buy $65 billion in bonds per month, down from $75 billion now. It cut its purchases of U.S. Treasuries and mortgage bonds equally. The decision received unanimous backing from Fed policymakers and suggests the policymakers are uniting as Vice Chair Janet Yellen prepares to succeed Benanke as head of the Fed on Feb. 1.

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