The US Federal Reserve plans to slow the pace of its bond purchases later this year. Fed Chairman Ben Bernanke says the central bank will bring them to a halt around mid-2014.
He said, "The committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year and if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year."
Bernanke also says that the Fed expects moderate growth to lead to continuing healing in the job market. He adds that policymakers anticipate inflation to move back up toward their long-term 2 percent goal. He made the statement at a news conference following the Fed’s decision, announced earlier on Wednesday, to continue buying 85 billion US dollars in bonds per month given still-high unemployment.
As a result of the Fed’s announcement to scale back its bond buying, US stocks fell sharply, the dollar rose and US bond prices fell.