Fed Officials Unite Behind Taper as Yellen Era Begins
By Joshua Zumbrun and Aki Ito - Jan 29, 2014
Federal Reserve policy makers cut the pace of bond buying for a second straight meeting, uniting behind a strategy of gradual withdrawal from Ben S. Bernanke’s unprecedented easing policy as Janet Yellen prepares to succeed him as chairman.
The Federal Open Market Committee said it will trim monthly purchases by $10 billion to $65 billion, citing labor-market indicators that “were mixed but on balance showed further improvement” and economic growth that has “picked up in recent quarters.”
It was the first meeting without a dissent since June 2011, showing the tapering strategy has brought together policy makers concerned the Fed’s record $4.1 trillion balance sheet risks causing asset price bubbles with those who, like Vice Chairman Yellen, say more needs to be done to reduce unemployment.
Related: Bernanke’s Unprecedented Rescue Unlikely to Be Repeated
“As we transition from Bernanke to Yellen, she’s in a pretty good place in terms of holding together the center of the committee,” said Stephen Stanley, the chief economist for Pierpont Securities LLC in Stamford, Connecticut. “It should be relatively easy to hold together a pretty wide consensus.”
Policy makers pressed on with a reduction in the purchases, put in place to speed a recovery from the worst recession since the Great Depression, even after payroll growth slowed in December and amid a rout in emerging-market currencies.
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http://www.bloomberg.com/news/2014-01-29/fed-cuts-qe-to-65-billion-pace-as-labor-market-improves-further.html
