Americas

Americas

U.S. Fed announces further cut in monetary stimulus program

30 January 2014 04:09 (UTC +04:00)

Baku-APA. With the U.S. economy improving, the Federal Reserve announced on Wednesday that it will further reduce its bond purchases by 10 billion U.S. dollars starting February, APA reports quoting Xinhua.

After scaling back the same amount of bond purchase in January, the U.S. central bank has decided to cut back on its monthly asset purchases from 75 billion dollars to 65 billion dollars, with 10 billion dollars trimmed equally from mortgage-back securities and Treasury bonds, the Fed said following a two-day policy meeting of the Federal Open Market Committee, the Fed's powerful policy making panel.

The decision was made as the U.S. economic activity picked up in recent quarters, and labor market indicators were mixed but overall indicated further improvement, the Fed said in a statement.

To boost growth from the prolonged financial crisis, the Fed has kept its short-term interest rate at the historically low levels and completed two rounds of quantitative easing programs, known as QE1 and QE2 since 2008.

In January, with the economy showing steady signs of recovery, the Fed began to scale back the bond purchase stimulus in its transition to normal monetary policy.