ST LOUIS/ BOISE, Idaho (Reuters) – While officials of the Federal Reserve have sparred over whether the U.S. central bank should continue full-bore with its massive bond-buying stimulus, two Fed officials with differing policy views agreed on Thursday that a national debt default could have devastating effects.
Budget gridlock at the U.S. Congress led to an October 1 partial government shutdown that threatens to hurt economic growth and has already delayed the release of key economic data such as the September jobs report. Lawmakers are now locked in debate over how to raise the government’s borrowing limit and avoid a U.S. debt default on October 17.
BOISE, Idaho (Reuters) – The U.S. Federal Reserve will reduce its massive bond-buying program gradually as the economy continues to improve, following no fixed schedule but responding to progress on jobs and inflation, a top Fed official said on Thursday.
“The first step will be to slow the pace of asset purchases over time, eventually ending them altogether,” John Williams, president of the San Francisco Federal Reserve Bank, said in remarks prepared for delivery to a group of business leaders and politicians at Boise State University. “This won’t be a slamming on the brakes, it will be an easing off the gas.”