The US Federal Reserve announces trimming of QE
The minutes of the Federal Open Market Committee on October 29–30 2013 quote the Fed’s officials as saying that they plan to begin trimming the central bank’s stimulus efforts in “the coming months”.
The US central bank is currently engaged in an $85bn (£53bn) a month bond buying programme to lower interest rates and boost the country’s economy.
“They [the participants] generally expected that the data would prove consistent with the Committee’s outlook for ongoing improvement in la-bor market conditions and would thus warrant trimming the pace of purchases in coming months,” the minutes read.
Although participants were reported to have mixed feelings about ending QE, the FOMC’s minutes said that they “also considered scenarios under which it might, at some stage, be appropriate to begin to wind down the programme before an unambiguous further improvement in the outlook was apparent.”
Providing the current economic outlook and that of the coming months, the FOMC’s participants reportedly said that the data available at the time of meeting suggested that economic activity continued to rise at a moderate pace.
Although total payroll employment increased further in September, the unemployment rate was still high, the minutes also said.
The Fed’s officials also anticipated that real GDP would accelerate in 2014 and 2015, while the pace of expansion in real GDP this year would be about the same as the growth rate of potential output.
Next year’s GDP real growth was said to be supported by an easing in the effects of fiscal policy restraint on economic growth, increases in consumer and business sentiment, further improvements in credit availability and financial conditions, and accommodative monetary policy.
Meanwhile, Janet Yellen will take an important step on Thursday toward becoming the first woman to lead the US Federal Reserve. The banking panel, where Obama’s Democrats occupy 12 of the 22 seats, will vote at 10.00 am (15:00 GMT) on whether to pass her confirmation forward for consideration by the full Senate.
The last Federal Open Market Committee meeting under Bernanke’s leadership is scheduled to take place from 17 – 18 December.
Click here to read the Federal Reserve’s meeting full minutes