Fed tapering could begin later this year
โพสต์แล้ว: พฤหัสฯ. มิ.ย. 20, 2013 8:22 am
June 19, 2013, 5:30 p.m. EDT
Fed tapering could begin later this year
Talk of bond-purchase tapering slams financial markets
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen, as the central bank expects.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated. Read MarketWatch’s blog of the Fed announcement and Bernanke news conference.
The Fed’s newly revised forecast and Bernanke’s comments slammed U.S. financial markets. Stocks on Wall Street ended sharply lower and the 10-year Treasury yield 10_YEAR +0.55% surged to 2.33%, its highest level since March 2012.
The central bank’s $85-billion-a-month bond-buying program has helped prop up stock prices and keep U.S. interest rates ultralow.
Reuters Enlarge Image
Federal Reserve Chairman Ben Bernanke speaks to reporters Wednesday
Bernanke, speaking in a news conference after the Fed meeting, tried to decouple a tapering of its asset purchases from any hike in short-term interest rates.
“The current level of the federal funds rate target is likely to remain appropriate for a considerable period after asset purchases are concluded,” Bernanke said.
The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
And the Fed chairman stressed the bank won't start to hike rates even once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
“Our policy is in no way predetermined,” Bernanke said. “Our policies are tied to what’s going on in the economy.”
Indeed, 14 of the 15 Fed members don’t expect the first rate hike until 2015, according to the bank statement.
“The Fed is in no hurry to remove monetary accommodation, but as the downside risk to the U.S. economy and labor market diminish, the rationale for maintaining emergency quantitative-easing measures becomes harder to justify,” said Scott Anderson, chief economist of Bank of the West.
Dean Maki, chief U.S. economist at Barclays, said he now thinks the Fed will reduce the pace of asset purchases to $70 billion-per-month at its meeting in mid-September. The purchases would end by march, he added.
Upbeat outlook
The Fed released its regular policy statement shortly before Bernanke’s news conference and the bank’s outlook showed subtle but important changes. The Fed said downside risks to the outlook have “diminished since the fall” and that the labor market had shown further improvement.
http://www.marketwatch.com/story/fed-mu ... 2013-06-19
Fed tapering could begin later this year
Talk of bond-purchase tapering slams financial markets
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen, as the central bank expects.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated. Read MarketWatch’s blog of the Fed announcement and Bernanke news conference.
The Fed’s newly revised forecast and Bernanke’s comments slammed U.S. financial markets. Stocks on Wall Street ended sharply lower and the 10-year Treasury yield 10_YEAR +0.55% surged to 2.33%, its highest level since March 2012.
The central bank’s $85-billion-a-month bond-buying program has helped prop up stock prices and keep U.S. interest rates ultralow.
Reuters Enlarge Image
Federal Reserve Chairman Ben Bernanke speaks to reporters Wednesday
Bernanke, speaking in a news conference after the Fed meeting, tried to decouple a tapering of its asset purchases from any hike in short-term interest rates.
“The current level of the federal funds rate target is likely to remain appropriate for a considerable period after asset purchases are concluded,” Bernanke said.
The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
And the Fed chairman stressed the bank won't start to hike rates even once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
“Our policy is in no way predetermined,” Bernanke said. “Our policies are tied to what’s going on in the economy.”
Indeed, 14 of the 15 Fed members don’t expect the first rate hike until 2015, according to the bank statement.
“The Fed is in no hurry to remove monetary accommodation, but as the downside risk to the U.S. economy and labor market diminish, the rationale for maintaining emergency quantitative-easing measures becomes harder to justify,” said Scott Anderson, chief economist of Bank of the West.
Dean Maki, chief U.S. economist at Barclays, said he now thinks the Fed will reduce the pace of asset purchases to $70 billion-per-month at its meeting in mid-September. The purchases would end by march, he added.
Upbeat outlook
The Fed released its regular policy statement shortly before Bernanke’s news conference and the bank’s outlook showed subtle but important changes. The Fed said downside risks to the outlook have “diminished since the fall” and that the labor market had shown further improvement.
http://www.marketwatch.com/story/fed-mu ... 2013-06-19