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Jan 30, 2014

In Bernanke’s final act, Fed cuts stimulus despite market turmoil

WASHINGTON (Reuters) – The Federal Reserve on Wednesday decided to trim its bond purchases by another $10 billion as it stuck to a plan to wind down its extraordinary economic stimulus despite recent turmoil in emerging markets.

The action was widely expected, although some investors had speculated that the U.S. central bank might put its plans on hold given the jitters overseas.

Jan 29, 2014

Fed cuts stimulus as expected; Bernanke prepares to depart

WASHINGTON, Jan 29 (Reuters) – The U.S. Federal Reserve on
Wednesday announced a further $10 billion reduction in its
monthly bond purchases as it stuck to a plan to wind down its
extraordinary stimulus despite recent turmoil in emerging
markets.

Fed Chairman Ben Bernanke, who hands the central bank’s
reins to Vice Chair Janet Yellen on Friday, also adjourned his
last policy-setting meeting without making any changes to the
U.S. central bank’s other main policy plank: its longer-term
plan to keep interest rates low for some time to come.

Jan 29, 2014

Fed poised for $10 billion taper as Bernanke bids adieu

By Ann Saphir and Jonathan Spicer

(Reuters) – Turmoil in emerging markets and a month of disappointing job growth at home are unlikely to deter the Federal Reserve from trimming its bond-buying stimulus on Wednesday, as Ben Bernanke wraps up his last policy meeting at the helm of the U.S. central bank.

Overall signs of improvement in the U.S. economy suggest Fed officials will stay on track to cut monthly purchases of Treasuries and mortgage-backed securities by $5 billion each, bringing the total of their monthly asset purchases to $65 billion.

Jan 28, 2014

Emerging market pain not about to faze U.S.-focused Fed

NEW YORK (Reuters) – The U.S. Federal Reserve, intent on cutting its stimulus again this week, is not about to blink in the face of a brutal selloff of emerging market assets that could yet gain steam in Turkey, Argentina and elsewhere.

Though the central bank’s 16-month-old bond-buying program is meant to boost the U.S. economy, in the past it has lifted currencies and stocks in emerging markets that have benefited from a rush of international investment and the resulting lower interest rates.

Jan 27, 2014

Analysis: Emerging market pain not about to faze U.S.-focused Fed

NEW YORK (Reuters) – The U.S. Federal Reserve, intent on cutting its stimulus again this week, is not about to blink in the face of a brutal selloff of emerging market assets that could yet gain steam in Turkey, Argentina and elsewhere.

Though the central bank’s 16-month-old bond-buying program is meant to boost the U.S. economy, in the past it has lifted currencies and stocks in emerging markets that have benefited from a rush of international investment and the resulting lower interest rates.

Jan 22, 2014

With Yellen on deck, Fed’s Bernanke to stick to low-rate vow

SAN FRANCISCO/NEW YORK (Reuters) – Federal Reserve policymakers will likely leave intact their delicately worded easy-money message when they meet next week, despite a surprisingly sharp drop in U.S. unemployment that threatens to make a central part of that message irrelevant.

Top Fed officials believe their landmark decision last month to reduce the pace of the U.S. central bank’s bond-buying stimulus was well received by financial markets. That, in turn, allows them to make another $10 billion cut to the bank’s monthly bond purchases at the January 28-29 meeting without needing to adjust their promise to keep interest rates low in the future.

Jan 16, 2014

Financial stability concerns should not deter Fed on policy: Bernanke

WASHINGTON (Reuters) – The U.S. Federal Reserve should give the economy the stimulus it needs despite “credible” worries that its massive bond-buying program could destabilize the financial system, Fed Chairman Ben Bernanke said on Thursday.

In his last planned public remarks as head of the central bank, Bernanke said concern about the potential harm to financial stability is the only risk from unconventional monetary policies “that I find personally credible.”

Jan 14, 2014

Fed hawks, wielding votes, urge faster end to bond buying

DALLAS/PHILADELPHIA (Reuters) – The Federal Reserve should bring its bond-buying program to a swift close, according to two of its most hawkish policymakers who take up voting power this year, with Dallas Fed chief Richard Fisher vowing to use his vote to support cuts to the program even if stocks, now near record highs, take a tumble.

The comments on Tuesday from Fisher and Charles Plosser, president of the Philadelphia Fed, come roughly two weeks before the U.S. central bank’s first policy meeting of the year. They suggest that incoming Chair Janet Yellen will face internal pressure to ramp up withdrawal of the extraordinary stimulus, which policymakers last month decided to trim to $75 billion a month from $85 billion.

Jan 14, 2014

U.S. on firmer footing than in past several years: Fed’s Plosser

PHILADELPHIA (Reuters) – Predicting more economic growth and a further drop in U.S. unemployment this year, a top U.S. central banker said on Tuesday he would prefer a quicker-than-planned withdrawal of policy stimulus.

Philadelphia Fed President Charles Plosser, whose hawkish views are well known at the Federal Reserve, downplayed a weak December jobs report and rebuffed concerns some of his colleagues have voiced over so many Americans having dropped out of the work force.

Jan 12, 2014

Inflation, strangely low, holds key to 2014 Fed policy

SAN FRANCISCO/NEW YORK (Reuters) – Stubbornly weak inflation is shaping up as the wild card for U.S. monetary policy makers this year, with top Federal Reserve officials stumped by why it has lingered so low for so long and at odds as to what to do about it.

As the Fed wrestled through last year with deciding when to start trimming its massive bond-buying stimulus, the bulk of attention was focused on the unemployment rate, which until recently has been slow to fall following its spike up to 10 percent during the recession.