Market Expects $10 Billion Taper on Bernanke’s Farewell

Turmoil in emerging markets and a month of disappointing job growth at home are unlikely to deter the Federal Reserve from trimming its bond-buying stimulus on Wednesday, as Ben Bernanke wraps up his last policy meeting at the helm of the U.S. central bank.
Overall signs of improvement in the economy suggest Fed officials will stay on track to cut monthly purchases of Treasurys and mortgage-backed securities by $5 billion each, bringing the total of their monthly asset purchases to $65 billion.

The meeting is Bernanke’s last before Vice Chair Janet Yellen moves into the top spot.

Bernanke took the Fed far into uncharted territory during his eight years on the job, building a $4 trillion balance sheet and keeping interest rates near zero for more than five years to pull the economy from its worst downturn in decades.

With those efforts beginning to pay off—and concerns growing over possible harm from so much money printing—the Fed announced plans last month to phase out the bond buying by late this year unless the economy takes a decided turn for the worse.

It started by trimming its monthly purchases to $75 billion from $85 billion, and on Wednesday, the central bank is expected to shave another $10 billion.

via Fed poised for $10 billion taper as Bernanke bids adieu

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