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Fed slows quantitative easing

Posted at December 19, 2013 | Categories : News

The Federal Reserve has opted to “modestly reduce” its quantitative easing (QE) programme, in light of the “cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions”.

Beginning in January, the Fed will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month.

At the same time, it will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month.

Market reaction to the $10 billion per month reduction in QE is awaited.