News Column

US Fed To Do More Bond Buying in 2013

Nov 15 2012 1:26PM
US Fed To Do More Bond Buying in 2013

Some Federal Reserve officials thought additional bond buying would be needed to fill the gap when the Operation Twist program expires at the end of the year, minutes of the Fed's October policy meeting showed on Wednesday.

"A number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity extension program in order to achieve a substantial improvement in the labor market," the Fed noted in minutes released on Wednesday for a Federal Open Market Committee (FOMC) meeting held from Oct. 23 to 24.

In June, the central bank decided to extend through the end of the year the Operation Twist, a program of selling short-term securities to buy longer-term debt to push down long-term interest rates.

In a bid to bolster the economic recovery, the Fed in September launched the third round of quantitative easing, an open-ended program to buy agency mortgage-backed securities at a pace of 40 billion U.S. dollars per month.

The minutes also showed that many participants saw the uncertainty attending the unresolved U.S. fiscal situation and the ongoing fiscal and financial strains in the euro area as factors likely to restrain the pace of economic growth in coming months.

The FOMC members generally expected that pace of the economic recovery to stay moderate over coming quarters.

The Fed will conduct its last policy meeting of this year on Dec. 11 and 12.

Source: Copyright Xinhua News Agency - CEIS 2012

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