Fed Signals Possible Slowing of QE

The Federal Reserve signaled it may consider slowing the pace of asset purchases as officials extended a debate over whether record monetary easing risks unleashing inflation or fueling asset-price bubbles.

Several participants at the Federal Open Market Committee’s Jan. 29-30 meeting “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” according to the minutes of the gathering released yesterday.

Stocks fell, along with oil and gold, on bets the central bank will curb stimulus earlier than expected, even as several Fed officials warned against a premature end to $85 billion in monthly bond buying. A gradual reduction in purchases may win the FOMC’s support because it gives policy makers flexibility, said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York.


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