Trader Stephen McSherry, right, works on the floor of the New York Stock Exchange, Wednesday, Dec. 18, 2013. Stocks were modestly higher in early trading on Wall Street Wednesday as the Federal Reserve ends its last two-day policy meeting of 2013. Homebuilder stocks rose sharply after the government reported that construction of new homes surged in November. (AP Photo/Richard Drew)
December 18, 2013 - 11:01 AM
WASHINGTON - The Federal Reserve says it will reduce its $85 billion a month in bond purchases by $10 billion starting in January, citing a stronger U.S. job market. And it says it will take further steps to reduce the pace of the purchases next year if that improvement continues.
The reduction is a signal that Fed policymakers are ready to ease their massive support for the economy provided since the Great Recession. The bond purchases have helped keep long-term interest rates low to encourage more borrowing and spending.
To cushion to impact on financial markets, the Fed strengthened its commitment to record-low short-term rates. It says it plans to hold its key short-term rate near zero "well past" the time when unemployment falls below 6.5 per cent.
News from © The Associated Press, 2013