Categories: BankingPolitics

Federal Reserve Cuts Stimulus to $65 Billion a Month

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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.

Paul Dykewicz

Paul Dykewicz is the editor of StockInvestor.com and the editorial director of Eagle Financial Publications in Washington, D.C. He writes and edits for the website, as well as edits investment newsletters, time-sensitive trading alerts and other reports published by Eagle. He also is an accomplished, award-winning journalist who has written for Dow Jones, USA Today and other publications, as well as served as business editor of a daily newspaper in Baltimore. In addition, Paul is the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain." He received his MBA in finance from Johns Hopkins University, where he was a two-time president of the school's Finance Club. In addition, Paul has a bachelor's degree from the University of Michigan and a master's degree in journalism from Michigan State University. Outside of work, Paul volunteers with a faith-based organization to assist the poor in Southeast Washington, D.C., to learn personal finance skills to lift themselves out of debt.