MONEY: What growth? In the money supply!

Fed Cuts Bond Buys, Sees Growth Pickup

The Federal Reserve said it would reduce its mortgage and Treasury bond buying program to $45 billion per month, while pointing to a growth pickup after a bad winter and sticking to previous guidance it has given on the outlook for short-term interest rates.

The steps were widely expected by investors before the meeting and represent a continuation of the monetary policy strategy laid out by Fed Chairwoman Janet Yellen and former Chairman Ben Bernanke in the last few months.

The Fed’s move came after a report that showed the U.S. economy barely grew in the first quarter. Fed officials acknowledged the first quarter slowdown was worse than expected by saying activity “slowed sharply.” Previously they had just said activity merely slowed.

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What marketplace are they watching?

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