World News

US Central Bank Trims Its Support of American Economy

Policy makers at the U.S. central bank are again trimming their direct support of the world's largest economy.

The Federal Reserve said Wednesday it will buy $65 billion worth of securities in February to pump more money into the economy, boost job growth and keep interest rates low. But that asset purchase would be $10 billion less than this month, and would keep the central bank on course to wind down the program altogether by the end of the year, if the U.S. economy continues to advance.

In a statement after a two-day meeting in Washington, the Fed said it sees economic activity picking up, "with growing underlying strength in the broader economy."

The bank said it is keeping its benchmark interest rate near zero, and likely will continue to keep it that low "well past the time" that the country's unemployment rate reaches 6.5 percent. The jobless rate now is at 6.7 percent, a five-year low.



The central bank cut the asset purchases at the last policy meeting headed by outgoing chairman Ben Bernanke, as his eight-year tenure expires. Fed vice chair Janet Yellen will become the first woman to head the century-old agency on Saturday.

For more than a year, the central bank bought $85 billion worth of securities every month to pump money into the American economy as it steadily, but unevenly, recovered from the 2008 recession.

The Fed's cutback in its direct support for the U.S. economy has roiled markets and currencies in emerging economies throughout January. Growth had advanced in the emerging economies during the depths of the world downturn.

But now, investors fear that as the Fed eases off its securities purchases, and long-term interest rates edge higher in the U.S., billions of dollars of investment money will be pulled from the emerging economies. Instead, the money could be invested in the U.S. and other advanced economies for bigger returns.

One barometer Fed policy makers watch is the U.S. jobless rate. Even though the figure has fallen over the last year, the Fed noted that "labor market indicators were mixed" in recent months, even as they generally improved.

Much of the decline in the unemployment rate has been the result of discouraged long-term unemployed workers ending their search for new jobs, and thus not counted in the jobless figure. U.S. employers had been adding about 200,000 new jobs a month through the latter half of 2013, but just 74,000 in December.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs