Fed Continues Taper, ‘Despite Lowered Growth Expectations’

The Federal Open Market Committee (FOMC) has announced that it will taper its asset purchases by another $10 billion as most people expected, reducing agency mortgage-backed securities and long-term Treasury bond purchases by $5 billion each. Fed thinks economic activity can support higher employment “Economic activity has rebounded in recent months. Labor market indicators generally showed further improvement. The unemployment rate, though lower, remains elevated. Household spending appears to be rising moderately and business fixed investment resumed its advance, while the recovery in the housing sector remained slow,” said the FOMC statement. While unemployment is still too high, the FOMC…