The Federal Reserve said today it will further curtail its bond purchases due to an improving U.S. job market, but offered no hint on when it might start raising short-term interest rates.
A statement from the Federal Reserve Open Market Committee said:
"Beginning in July, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $15 billion per month rather than $20 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $20 billion per month rather than $25 billion per month," the FOMC said.
"[The] Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation," it said.
The Associated Press says:
"The Fed also downgraded its forecast for growth for 2014, acknowledging that a harsh winter caused the economy to shrink in the January-March quarter. In addition, the Fed barely raised its forecast for inflation."The Fed expects growth to be just 2.1 percent to 2.3 percent this year, down from 2.8 percent to 3 percent in its last projections in March. It thinks inflation will be a slight 1.5 percent to 1.7 percent by year's end, near its earlier estimate."
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