The end of QE: Economists in the Bloomberg survey were almost unanimous, with 62 of 64 saying the FOMC will end its third round of asset purchases at this week’s meeting. Yellen pledged to do just that following the committee’s Sept. 17 session if progress continued toward the Fed’s goals on unemployment and inflation.
Fed St. Louis President James Bullard, who doesn’t vote on policy this year, said Oct. 16 the central bank should consider a delay in ending the program in light of falling inflation expectations. “That option will be on the table” and “there is a possibility” the group could reduce monthly purchases by $10 billion at the meeting and leave the final $5 billion reduction for December, according to Perli.
Still, ending QE “is a nearly universal expectation,” said Dana Saporta, an economist at Credit Suisse Securities USA in New York. “It would be quite a statement by the FOMC if they don’t.”
Even with the end of QE, the Fed will still hold a record $4.48 trillion balance sheet accumulated during the three rounds of asset purchases. That will continue to keep a lid on borrowing costs by limiting the supply of securities trading on public markets and keeping yields lower than they otherwise would be.sumber; www.bloomberg.com
Fed St. Louis President James Bullard, who doesn’t vote on policy this year, said Oct. 16 the central bank should consider a delay in ending the program in light of falling inflation expectations. “That option will be on the table” and “there is a possibility” the group could reduce monthly purchases by $10 billion at the meeting and leave the final $5 billion reduction for December, according to Perli.
Still, ending QE “is a nearly universal expectation,” said Dana Saporta, an economist at Credit Suisse Securities USA in New York. “It would be quite a statement by the FOMC if they don’t.”
Even with the end of QE, the Fed will still hold a record $4.48 trillion balance sheet accumulated during the three rounds of asset purchases. That will continue to keep a lid on borrowing costs by limiting the supply of securities trading on public markets and keeping yields lower than they otherwise would be.sumber; www.bloomberg.com
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