Fed minutes: Fed reduced bond buys after seeing big job gains, worried about market reaction
January 08, 2014 - 11:02 AM
WASHINGTON - The Federal Reserve agreed last month to modestly reduce its bond purchases by $10 billion a month after seeing stronger job gains and other signs of an improving economy.
But minutes of the December 18-19 meeting show some participants worried that financial markets might misread the move as a step toward raising its key short-term interest rate.
The bond purchases are intended to keep long-term rates low.
In response, the Fed said it would keep its short-term rate low "well past" the time the unemployment rate dropped below 6.5 per cent, as long as inflation stayed low.
Some members wanted to lower the unemployment threshold to 6 per cent. But the majority wanted to make no change to the threshold.
News from © The Associated Press, 2014