U.S. Federal Reserve to end asset-purchase program in October

Nathan Andrada – Fourth Estate Cooperative Contributor

Washington, DC, United States (4E) – Minutes of the U.S. Federal Reserve’s June meeting released Wednesday showed that its asset-purchase program is expected to end in October on the condition that the economy remains on track.

Under the new plan, the Fed will make a final reduction of the program by $15bn at its meeting in October, after reducing it by $10bn at every prior meeting. The minutes also showed that the central bankers had a long discussion of how to exit the program.

Fed officials generally agreed to reinvest the proceeds of securities that mature on its balance sheet until after it had raised interest rates.

The minutes provided few signs about the Fed’s timetable on when it might potentially start tightening interest rates from near zero.

Fed officials said they would unveil more details of its exit plan from the stimulus by the end of the year.

The policy meeting took place well before the release of the official June employment data, which showed that June payrolls rose 288,000 and the jobless rate dropped to 6.1 percent, the lowest level in almost six years.

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