By Kevin G. Hall
McClatchy Washington Bureau
July 30, 2014
WASHINGTON — Citing the improving economy and a firming jobs markets, the Federal Reserve announced Wednesday it was again trimming its monthly purchases of government and mortgage bonds by another $10 billion and is on pace to end the program this year.
With the announcement, the rate-setting Federal Open Market Committee will now purchase $25 billion a month in bonds to stimulate the economy and is expected to further ratchet down purchases with the expectation of ending the controversial program late this year.
“The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions,” the Fed said in a statement, noting that it was again tapering back a program designed to spark lower long-term rates and juice the stock market.
The Fed’s has a dual mission to both keep inflation to around 2 percent and promote full employment. Its bond buying has been controversial because some critics fear it is akin to printing money and will spark a rise in wages and prices across the economy. The Fed slightly changed language in its Wednesday statement to reflect that inflation had ticked up closer to its longer-term target.
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