America's central bank announced this week it would begin rolling back its stimulus program, marking a beginning of the end of an unprecedented effort to stave off a global economic collapse. This is a measured step that should inspire confidence in the nation's march to sustainable growth.
The Federal Reserve said Wednesday that it would begin withdrawing some of the $4 trillion it had invested in the wake of the 2008 financial crisis. Paring back its portfolio will likely cause borrowing costs to slowly rise, though it also will put the Fed in position to intervene again in the event of another economic fallout.
Fed chairwoman Janet Yellen has helped calm the markets by taking a methodical approach to a change in course. She is open about the mixed record of the economy since the recession — low unemployment but modest income gains and weak growth. Her bullish view is tempered by new and structural changes affecting the modern economy.
Home prices seem to mirror the Fed's change in outlook, as sales point to a normalizing of credit, demand and spending, helping to ease fears of a new housing bubble. Still, consumer confidence is fickle. The political rancor in Washington has taken its toll, too, leaving the business community without a clear sign ahead on taxes, foreign trade and other economic issues. For now, the Fed is right to ease its grip. It played a critical role at a critical time in upholding the nation's economy. It cannot be hesitant to act again to preserve the nation's financial system and the role it plays across the world.