Make us your home page
Instagram

Fed maintains bond-buying stimulus to keep interest rates low

WASHINGTON — The Federal Reserve says the U.S. economy still needs support from its low interest rate policies because it is growing only moderately.

In a statement Wednesday after a policy meeting, the Fed said it would keep buying $85 billion a month in bonds to keep long-term interest rates low and encourage borrowing and spending.

Yet the Fed seemed to signal that it thinks the economy is improving despite some recent weak data and uncertainties caused by the partial government shutdown. The Fed no longer expresses concern, as it did in September, that higher mortgage rates could hold back hiring and economic growth.

Some analysts said this suggests that the Fed might be prepared to slow its bond purchases by early next year — sooner than some have assumed.

"The tone was probably more positive on the outlook than most people expected," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.

Some economists noted that Congress' budget fight has clouded the Fed's timetable for tapering its bond purchases. Though the government reopened Oct. 17 after a partial shutdown and a threatened default on its debt was averted, Congress passed only temporary fixes. More deadlines and possible disruptions lie ahead.

Without a budget deal by Jan. 15, another shutdown is possible. Congress must also raise the government's debt ceiling after Feb. 7. If not, a market-rattling default will remain a threat.

If the government manages to avert another shutdown in mid January, Dana Saporta, an economist at Credit Suisse, said, "We could see a taper as soon as the Jan. 29 meeting."

But she added that a continued budget impasse would likely delay any pullback in the Fed's bond purchases until March or later.

The Fed noted again in its statement that budget policies in Washington have restrained economic growth.

Fed maintains bond-buying stimulus to keep interest rates low 10/30/13 [Last modified: Wednesday, October 30, 2013 8:31pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. For Gov. Rick Scott, 'fighting' could mean vetoing entire state budget

    State Roundup

    Every day, Gov. Rick Scott is getting a lot of advice.

    The last time a Florida governor vetoed the education portion of the state budget was in 1983. Gov. Bob Graham blasted fellow Democrats for their “willing acceptance of mediocrity.”
  2. Potential new laws further curb Floridians' right to government in the Sunshine

    State Roundup

    TALLAHASSEE — From temporarily shielding the identities of murder witnesses to permanently sealing millions of criminal and arrest records, state lawmakers did more this spring than they have in all but one of the past 22 years to chip away at Floridians' constitutional guarantees to access government records and …

    The Legislature passed 17 new exemptions to the Sunshine Law, according to a tally by the First Amendment Foundation.
  3. Data breach exposes 469 Social Security numbers, thousands of concealed weapons holders

    Corporate

    Social Security numbers for up to 469 people and information about thousands of concealed weapons holders were exposed in a data breach at Florida the Department of Agriculture and Consumer Services. The breach, which the agency believes happened about two weeks ago, occurred in an online payments system, spokesperson …

    Commissioner of Agriculture Adam Putnam on Monday that nearly 500 people may have had their Social Security numbers obtained in a data breach in his office.
[Times file photo]

  4. Trigaux: Can Duke Energy Florida's new chief grow a business when customers use less power?

    Energy

    Let's hope Harry Sideris has a bit of Harry Houdini in him.

    Duke Energy Florida president Harry Sideris laid out his prioriities for the power company ranging from improved customer service to the use of more large-scale solar farms to provide electricity. And he acknowledged a critical challenge: People are using less electricity these days. [SCOTT KEELER   |   Times]
  5. Citigroup agrees to pay nearly $100 million fine for Mexican subsidiary

    Banking

    NEW YORK — Citigroup has agreed to pay nearly $100 million to federal authorities to settle claims that a lack of internal controls and negligence in the bank's Mexican subsidiary may have allowed customers to commit money laundering.

    Citigroup has agreed to pay nearly $100 million to federal authorities to settle claims that a lack of internal controls and negligence in the bank's Mexican subsidiary may have allowed customers to commit money laundering. 
[Associated Press file photo]