HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » Latest Breaking News (Forum) » Fed Scales Back Stimulus ...

Wed Dec 18, 2013, 04:21 PM

Fed Scales Back Stimulus Campaign.

Source: nyt

The Federal Reserve said on Wednesday that it would reduce its monthly bond-buying campaign to $75 billion in January, beginning a retreat from its stimulus campaign, because it no longer saw the need for the full force of those efforts.

The Fed sought to offset concerns that it was once again pulling back too soon by reinforcing its intent to hold short-term interest rates near zero “well past the time that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below the committee’s 2 percent longer-run goal.”

The steps, announced after a two-day meeting of the Fed’s policy-making committee, represent the beginning of a long-anticipated shift in Fed strategy. Officials say that the bond-buying campaign, which has totaled $85 billion a month until now, has contributed to a modest increase in job creation, but that they are concerned about the Fed’s reliance on a relatively untested form of monetary policy. They would like instead to lean more heavily on “forward guidance” about short-term interest rates, a more familiar policy tool.

“The committee sees the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy,” the committee said in a statement on Wednesday.



Read more: http://www.nytimes.com/2013/12/19/business/economy/fed-scales-back-stimulus-campaign.html?hp



Dow way up, by 249.

5 replies, 855 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 5 replies Author Time Post
Reply Fed Scales Back Stimulus Campaign. (Original post)
elleng Dec 2013 OP
Gothmog Dec 2013 #1
elleng Dec 2013 #3
Jesus Malverde Dec 2013 #2
elleng Dec 2013 #4
Jesus Malverde Dec 2013 #5

Response to elleng (Original post)

Wed Dec 18, 2013, 05:03 PM

1. The market has reacted favorably to this move

It appears that the market was expecting larger cuts

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Gothmog (Reply #1)

Wed Dec 18, 2013, 05:05 PM

3. Maybe.

Maybe just glad it's 'over?' or begun to be over??? Reduced the uncertainty to some extent.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to elleng (Original post)

Wed Dec 18, 2013, 05:04 PM

2. U.S. stocks soar as Fed scales back stimulus

U.S. stocks rallied Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in January as confidence in the underlying strength of the economy.

Dow Jones Industrial Average DJIA +1.85% jumped 228 points, or 1.5%, to 16,105.40. The S&P 500 index SPX +1.67% rallied 24 points, or 1.3% to 1,805.84, within a hair’s breadth of its all-time high. Nasdaq Composite COMP +1.15% was up 32 points or 0.8% to 4,055.70.

All ten main sectors on the S&P 500 were higher with financials and health care stocks leading the gains. Nasdaq’s rally was somewhat hampered by Apple Inc., AAPL -0.15% which fell 1.1%.

The Federal Open Market Committee stressed its commitment to low short-term interest rates and added new language that it plans to maintain the target Fed funds rates “well past the time that the unemployment rate declines below 6.5%.”

Earlier, housing starts data showed that Americans built more new homes than expected in November, shrugging off rising mortgage rates. The pace at which new homes were built soared to a seasonally adjusted annual rate of 1.09 million, the highest rate since February 2008, with surges for single-family homes and apartments, the government reported Wednesday.

http://www.marketwatch.com/story/us-stocks-up-on-strong-housing-data-2013-12-18?link=MW_latest_news

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Jesus Malverde (Reply #2)

Wed Dec 18, 2013, 05:08 PM

4. Dow up 292 I think,

according to NYT @ 4:05.

Reply to this post

Back to top Alert abuse Link here Permalink


Reply to this thread