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| Version 2 | Version 3 |
|---|---|
| US Federal Reserve pulls back on stimulus effort | US Federal Reserve pulls back on stimulus effort |
| (35 minutes later) | |
| The US Federal Reserve has announced a slowdown in its effort to boost the US economy. | The US Federal Reserve has announced a slowdown in its effort to boost the US economy. |
| The central bank said it planned to scale back its $85bn (£51.8bn) a month bond buying programme by $10bn a month. | The central bank said it planned to scale back its $85bn (£51.8bn) a month bond buying programme by $10bn a month. |
| Stimulus of this kind is designed to lower interest rates and boost economic activity | Stimulus of this kind is designed to lower interest rates and boost economic activity |
| The Fed's governing committee cited stronger job growth as a reason for the decision to pullback its programme of bond buying. | The Fed's governing committee cited stronger job growth as a reason for the decision to pullback its programme of bond buying. |
| The announcement followed a two-day meeting in Washington, DC. | The announcement followed a two-day meeting in Washington, DC. |
| The Fed's decision to begin to ease its extraordinary stimulus efforts also indicates that the central bank believes that the US economy has finally strengthened enough that it no longer needs as much support. | The Fed's decision to begin to ease its extraordinary stimulus efforts also indicates that the central bank believes that the US economy has finally strengthened enough that it no longer needs as much support. |
| In its forecast for the coming years, the Fed said the employment situation will improve faster than previously expected. | In its forecast for the coming years, the Fed said the employment situation will improve faster than previously expected. |
| It said the unemployment rate will fall to 6.3% in 2014 from its current level of 7%. | It said the unemployment rate will fall to 6.3% in 2014 from its current level of 7%. |
| This could set the pace for further reductions in the Fed's stimulus efforts in the coming year. | This could set the pace for further reductions in the Fed's stimulus efforts in the coming year. |
| In a press conference to discuss the Fed's announcement, Chairman Ben Bernanke said: "If incoming data broadly support the committee's support for employment we will likely reduce the pace of committee's purchases in further steps at future meetings." | |
| However, he also cautioned: "Continued progress is by no means certain. Adjustments will be deliberate and dependent on incoming information." | However, he also cautioned: "Continued progress is by no means certain. Adjustments will be deliberate and dependent on incoming information." |
| 'Symbolic' | 'Symbolic' |
| US markets cheered the news, with the Dow Jones Industrial Average spiking more than 160 points, or over 1%, in the minutes after the announcement. | US markets cheered the news, with the Dow Jones Industrial Average spiking more than 160 points, or over 1%, in the minutes after the announcement. |
| That is partially because, while significant, the amount of the pullback in bond-buying was slightly less than expected. | That is partially because, while significant, the amount of the pullback in bond-buying was slightly less than expected. |
| "Ultimately this a very small amount - it's symbolic rather than more substantive," Steve Wood, chief market strategist at Russell Investments, told the BBC. | "Ultimately this a very small amount - it's symbolic rather than more substantive," Steve Wood, chief market strategist at Russell Investments, told the BBC. |
| "The takeaway from this is that while the Federal Reserve might be reducing the dosage of the antibiotic, they're not going to be discharging the patient anytime soon." | "The takeaway from this is that while the Federal Reserve might be reducing the dosage of the antibiotic, they're not going to be discharging the patient anytime soon." |
| Changing leadership | Changing leadership |
| Mr Bernanke insisted that the changing leadership at the Fed had no impact in the committee's decision. | Mr Bernanke insisted that the changing leadership at the Fed had no impact in the committee's decision. |
| Mr Bernanke is scheduled to step down on 31 January 2014 and it is expected that the current vice-chair, Janet Yellen, will be confirmed to take the helm later this week. | Mr Bernanke is scheduled to step down on 31 January 2014 and it is expected that the current vice-chair, Janet Yellen, will be confirmed to take the helm later this week. |
| "I have always consulted closely with Janet, even well before she was named by the President and I consulted closely with her on these decisions as well. And she fully supports what we did today," said Mr Bernanke. | "I have always consulted closely with Janet, even well before she was named by the President and I consulted closely with her on these decisions as well. And she fully supports what we did today," said Mr Bernanke. |
| When asked how he hoped future historians would view his legacy, he remained coy. | When asked how he hoped future historians would view his legacy, he remained coy. |
| "I hope I live long enough to read the textbooks," he said. | "I hope I live long enough to read the textbooks," he said. |