US Job Recovery Eased Tapering Decision From Fed

Federal Reserve officials wanted to move forward “cautiously” with their plan to reduce their stimulus program at their last meeting in December, according to minutes released Wednesday.
Last month, the Fed decided to reduce its monthly bond-buying program from $85 billion a month, down to $75 billion a month in January — a process that Wall Street has nicknamed ‘tapering’.

According to the minutes, the decision rested almost entirely on improvement in the job market. Encouraged by a pickup in hiring since the Fed launched the bond-buying program in September 2012, officials were ready to start slowing the stimulus program.

As Fed chairman Ben Bernanke has noted, that step is meant to be the first among many gradual reductions before the Fed ends the program completely.

“Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps,” the Fed said in the minutes.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza