Fed Stays the Course on Bond Buying; Officials Leave Investors on Tenterhooks About When They Will Wind Down Program
Federal Reserve officials reaffirmed their plan to try winding down an easy-money program that has charged up global markets but left investors on tenterhooks about when or how aggressively they would move.</br></br>Minutes of the Fed's July 30-31 policy meeting, released Wednesday, suggested officials were on track to start winding down the $85 billion-a-month bond-buying program, possibly as early as September, if the economy strengthens as they expect.</br></br>They were, however, a bit more uncertain than in June about whether economic growth would pick up as they forecast and about the gains they were seeing in the job market.</br></br>Reflecting the cautiousness shown in the minutes and their own uncertainty about how the economy will perform in the months ahead, some Fed officials have begun talking about making a small move when they do start pulling back on bond buying. "If you're very uncertain about how strong the improvement in the economy is, and how self-sustaining, then you should move in fairly small increments," Eric Rosengren, president of the Federal Reserve Bank of Boston, said in an interview Wednesday with The Wall Street Journal.</br></br>Mr. Rosengren, a strong supporter of the easy-money policies, said he was still forming a judgment about whether the economy was improving as expected. "This is a good time to be patient and very watchful," he said.