The Canadian Press - ONLINE EDITION

Fed slows bond buying further but provides no clear signal on timing of first rate hike

  • Print

WASHINGTON - The Federal Reserve is further slowing the pace of its bond purchases because it thinks an improving U.S. economy needs less help. But it's offering no clearer hint of when it will start raising its benchmark short-term interest rate.

The Fed on Wednesday reiterated its plan to keep short-term rates low "for a considerable time" after its bond purchases end. Most economists think a rate increase is about a year away despite a strengthening economy. The government estimated Wednesday that the economy grew at a fast 4 per cent annual rate last quarter.

In a statement after a two-day policy meeting, the Fed revised the wording of its previous statement to acknowledge that while the unemployment rate has fallen steadily, the job market remains subpar in other ways. The Fed didn't specify what it meant. But Chair Janet Yellen expressed concern to Congress this month about stagnant wage growth, a high number of part-time workers who can't find full-time jobs and the proportion of the unemployed who have been out of work for more than six months.

The Fed also tweaked its statement to say inflation had risen closer to its 2 per cent target. The statement said concerns that inflation would persistently run below the Fed's 2 per cent target had "diminished somewhat." But it expressed no concerns about the slight acceleration in prices.

The Fed announced, as expected, that it's paring its monthly purchases by another $10 billion to $25 billion. The bond purchases have been intended to keep long-term borrowing rates low and are set to end in October.

The Fed's decision was approved on a 9-1 vote with Charles Plosser, president of the Fed's Philadelphia regional bank, dissenting. The statement said Plosser objected to continuing to include language that the Fed's key short-term interest rate was likely to remain at record low near zero "for a considerable time" after the end of its bond purchases. Plosser felt that language did not "reflect the considerable economic progress that has been made."

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Jets This Week: Predicting the line-ups

View more like this

Photo Store Gallery

  • Perfect Day- Paul Buteux walks  his dog Cassie Tuesday on the Sagimay Trail in Assiniboine Forest enjoying a almost perfect  fall day in Winnipeg- Standup photo – September 27, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A baby Red Panda in her area at the Zoo. International Red Panda Day is Saturday September 15th and the Assiniboine Park Zoo will be celebrating in a big way! The Zoo is home to three red pandas - Rufus, Rouge and their cub who was born on June 30 of this year. The female cub has yet to be named and the Assiniboine Park Zoo is asking the community to help. September 14, 2012  BORIS MINKEVICH / WINNIPEG FREE PRESS

View More Gallery Photos

Poll

Do you think e-cigarettes should be banned by the school division?

View Results

Ads by Google