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Federal Reserve commits to stimulus slowdown in minutes | Federal Reserve commits to stimulus slowdown in minutes |
(35 minutes later) | |
The US Federal Reserve intends to continue reducing economic stimulus measures, minutes of the central bank's January meeting have confirmed. | The US Federal Reserve intends to continue reducing economic stimulus measures, minutes of the central bank's January meeting have confirmed. |
The Fed's policy makers said they expected to cut monthly bond-buying in predictable $10bn steps. | The Fed's policy makers said they expected to cut monthly bond-buying in predictable $10bn steps. |
The Fed cut its bond-buying programme to $65bn a month at the end of its most recent meeting in January. | The Fed cut its bond-buying programme to $65bn a month at the end of its most recent meeting in January. |
That came despite a string of disappointing US economic data, including weak jobs figures. | That came despite a string of disappointing US economic data, including weak jobs figures. |
The bond purchasing programme is intended to keep interest rates low and stimulate growth. | The bond purchasing programme is intended to keep interest rates low and stimulate growth. |
According to the minutes of the January meeting: "Several participants argued that, in the absence of an appreciable change in the economic outlook, there should be a clear presumption in favour of continuing to reduce the pace of purchases by a total of $10bn at each [policy] meeting." | According to the minutes of the January meeting: "Several participants argued that, in the absence of an appreciable change in the economic outlook, there should be a clear presumption in favour of continuing to reduce the pace of purchases by a total of $10bn at each [policy] meeting." |
Some members raised the possibility that the short-term interest rate, also known as the federal funds rate, could be increased sooner than expected, as the unemployment rate is expected to fall below 6.5%. | Some members raised the possibility that the short-term interest rate, also known as the federal funds rate, could be increased sooner than expected, as the unemployment rate is expected to fall below 6.5%. |
The federal funds rate has been at 0% since 2008. | The federal funds rate has been at 0% since 2008. |
However, most members remained committed to keeping rates low for the foreseeable future. | However, most members remained committed to keeping rates low for the foreseeable future. |
Overall, members of the Federal Open Market Committee (FOMC) saw an increasingly rosy economic picture through the rest of 2014. | Overall, members of the Federal Open Market Committee (FOMC) saw an increasingly rosy economic picture through the rest of 2014. |
"The committee expected that, with appropriate policy accommodation, the economy would expand at a moderate pace and the unemployment rate would gradually decline toward levels consistent with the dual mandate," the minutes said. | "The committee expected that, with appropriate policy accommodation, the economy would expand at a moderate pace and the unemployment rate would gradually decline toward levels consistent with the dual mandate," the minutes said. |
This was the last meeting helmed by outgoing chairman Ben Bernanke. | This was the last meeting helmed by outgoing chairman Ben Bernanke. |
Current Federal Reserve chair Janet Yellen is set to lead her first meeting when the FOMC next meets in March. |
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