Fed Holds Bond Purchases Level


The Federal Reserve announced no significant changes today when officials kept interest rates at their current near zero levels. They also decided to keep the monthly bond purchases designed to stimulate the economy level. The reduction in the amount of bond purchases has become known as ‘taper.’ Whether the Fed will taper or not is of great interest to investors.

The Fed warned last month that a government shutdown could negatively impact the economy in such a way that the Fed would not be able to adjust the stimulus programs as they had forecast this summer.

The Fed has stated repeatedly that the jobs numbers need to improve before they will alter their stimulus. I have seen several interviews now of economists who expect the Fed’s programs to remain intact into 2014.