The U.S. Federal Reserve could begin cutting back on its massive bond-buying program this summer if the economy continues to pick up steam, a top Fed official said on Wednesday.
The Fed is buying $85 billion in Treasuries and mortgage-backed securities each month to push down long-term interest rates and encourage hiring, and has vowed to continue the program until there is substantial improvement in the labor market outlook.
“I expect we will meet the test for substantial improvement in the outlook for the labor market by this summer. If that happens, we could start tapering our purchases then,” San Francisco Federal Reserve Bank President John Williams said in remarks prepared for delivery to Town Hall Los Angeles. “If all goes as hoped, we could end the purchase program sometime late this year.”
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