Chairman Ben S. Bernanke said the Federal Reserve would alter its monthly bond buying in response to gains in the job market, underscoring a need for flexibility as he expands Fed assets beyond a record $3 trillion.
“We may adjust the flow rate of purchases month to month to appropriately calibrate the amount of accommodation we’re providing, given the outlook for the labor market,” Bernanke said yesterday at a press conference after a two-day meeting of the Federal Open Market Committee. The Fed will adjust buying in a “sensitive way” based on several measures, including payrolls, wages and jobless claims.
Bernanke provided a clearer road map than ever before on what’s needed before the central bank trims its purchases while steering clear of any suggestion that a reduction in $85 billion in monthly bond buying is imminent. His comments pushed up stocks while Treasury yields remained higher.
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