The Federal Open Market Committee has cut another $10 billion from it quantitative easing program. The reduction brings the Fed's monthly bond purchases to $35 billion with $15 billion going toward mortgage bonds and $20 billion toward treasuries.
In a statement on its latest policy move, the FOMC wrote,"growth in 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." The tone of the note was more optimistic than in prior months.
The FOMC also noted, "The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions."
The move is in line with prior cuts to the easy money program and consistent with the committee's earlier guidance. The stock market moved into positive territory following the 2 p.m. release Wednesday coming off of a down start to the trading day. Investors are waiting to see if Federal Reserve Chair Janet Yellen offers any meaningful commentary in her 2:30 p.m. press conference. Before the conference, the Dow Jones Industrial Average was up by about 23 points, or 0.14% and the S&P 500 was up 0.3%. The 10-year Treasury note yield was flat.
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