The U.S. Federal Reserve will start scaling back its monthly bond-buying program as early as next month, but the reduction will be gradual. The Federal Reserve has been buying 85 billion dollars a month in government bonds in an effort to keep interest rates low and boost economic growth.
The US Federal Reserve officials said they plan to begin trimming the central bank's stimulus efforts in the coming months. They believe that the US recovery is strengthening, according to minutes their October meeting.
The United States Senate Banking Committee approved on Thursday Janet Yellen's nomination to become the first woman to lead the Federal Reserve, sending it to the full Senate for a final vote. If she is confirmed, as is widely expected, the current No. 2 at the central bank will replace its chairman, Ben Bernanke, when his term expires on January 31, making her the most powerful woman in world finance.
US consumer prices fell 0.1% in October as petrol prices dropped, the US Labor Department has said. Petrol prices fell 2.9%, the biggest drop since April. The cost of new cars, clothes and healthcare also fell. The decrease meant that annual inflation in the 12 months to October was just 1%.
Janet Yellen, President Obama's choice to lead the Federal Reserve, said the central bank would not stop its stimulus efforts until the labor market improves and inflation rises. The comments came in a statement prepared for her confirmation hearing before the Senate Banking Committee. Thursday's hearing is a chance for Senators to question Ms Yellen.
President Barack Obama has nominated Federal Reserve Vice-Chair Janet Yellen to run the world's most influential central bank and urged the Senate to confirm her without delay. Yellen, an advocate for aggressive action to stimulate US economic growth through low interest rates and large-scale bond purchases, would replace Fed Chairman Ben Bernanke, whose second term ends on January 31.
The US Federal Reserve could still scale back its massive bond buying program at an October meeting should data point to a stronger economy, St. Louis Fed President James Bullard said on Friday. October is a live meeting he told Bloomberg television.
In a surprise move after a two-day meeting the US Federal Reserve said on Wednesday that it would continue buying bonds at a rate of 85 billion dollars monthly and expressed concern that a sharp rise in borrowing costs in recent months could weigh on the economy.
US stocks extended gains in volatile trading on Wednesday after the Federal Reserve gave no hint that a reduction in the pace of its bond-buying program is imminent. In a statement following its two-day meeting, the Fed said the economy continues to recover but still needs support.
Federal Reserve Chairman Ben S. Bernanke in September will trim the Fed’s monthly bond buying to 65 billion from the current pace of 85 billion dollars, according to a growing number of economists surveyed by Bloomberg News.