News / Economy

US Fed on Track to Reduce Monthly Bond Purchases

US Fed on Track to Reduce Monthly Bond Purchasesi
X
Mil Arcega
March 19, 2014 11:34 PM
The U.S. central bank is on pace to reduce its monthly bond purchases by another $10 billion - and interest rates will remain near record lows until the job market approaches something closer to normal. So says Janet Yellen, who held her first news conference Wednesday as head of the U.S. Federal Reserve. Mil Arcega has more.
The U.S. central bank is on pace to reduce its monthly bond purchases by another $10 billion - and interest rates will remain near record lows until the job market approaches something closer to normal.  So says Janet Yellen, who held her first news conference Wednesday as head of the U.S. Federal Reserve.

There’s a new Fed chief in town - but in terms of monetary policy, there's very little difference between Janet Yellen and her predecessor, Ben Bernanke.  Despite her new responsibilities, the former central bank vice chair says don’t expect any surprises.

“In terms of the conduct of business, it’s pretty much the same as usual.  I’m not envisioning, nor have there been so far, any radical changes in how the Federal Reserve does its business," said Yellen.

That includes winding down the bank’s accommodative policies that have kept interest rates near record lows.  This means monthly bond purchases will drop another $10 billion next month to $55 billion a month.

The one notable change is the committee's decision to stop using a threshold level of 6.5 percent unemployment to decide when to start raising rates.

“Even after employment and inflation are near mandate consistent levels, economic conditions may, for some time, warrant keeping short-term interest rates below levels the committee views as normal in the long run," said Yellen.

Instead, steady job growth and a target level of 2 percent inflation will determine the pace of interest rate appreciation.

Mark Hamrick is Washington bureau chief at Bankrate.com.

“It’s an acknowledgment that 6.5 percent as a target was not perfect, because we know in the past that we’ve seen the unemployment rate decline for the wrong reasons," said  Hamrick.

At 6.7 percent - U.S. unemployment is close to a five-year low, but, Yellen says unusually bad weather in January and February has made assessing the underlying economy especially challenging.

You May Like

Photogallery US to Send 3,000 Troops to Liberia in Expanded Ebola Effort

At US Centers for Disease Control and Prevention in Atlanta, Obama is to announce troop deployment, other details of US plans to fight Ebola outbreak More

China Muslims Work to Change Perceptions After Knife Attacks

Muslims in Kunming say that they condemn the violence, it is not a reflection of the true beliefs of their faith More

Humanitarian Aid, Equipment Blocked in Cameroon

Move is seen as a developing supply crisis in West Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Enviropreneur Seeks to Save the Environment, Empower the Communityi
X
September 16, 2014 2:06 PM
Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7735
JPY
USD
107.03
GBP
USD
0.6155
CAD
USD
1.1011
INR
USD
60.954

Rates may not be current.