Fed Announces Plan to Slow Its Bond Buying Program
The New York Times
The Federal Reserve is dealing with high inflation at a time when millions of workers remain on the job market’s sidelines.
Federal Reserve officials took their first major step toward withdrawing monetary policy support as the economy heals from pandemic disruptions, laying out a plan to slow their asset buying program as they struck a slightly more worried tone about rapid inflation.
“In light of the substantial further progress the economy has made toward the committee’s goals since last December, the committee decided to begin reducing the monthly pace of its net asset purchases,” the Fed said in a statement released Wednesday, referring to its policy-setting group.
The central bank has been buying $120 billion in mortgage-backed securities and Treasury bonds each month to keep cash flowing through the financial system, but will reduce that by $15 billion per month starting this month. That pace would bring the program to a close by the middle of 2022 if it is sustained.
