The Federal Reserve is tapering its monthly bond-buying program to $75 billion from $85 billion.
“Reflecting cumulative progress and an improved outlook for the job market,” the Federal Open Market Committee decided yesterday to “modestly reduce the monthly pace at which it is adding to the longer-term securities on its balance sheet,” outgoing Fed chairman Ben Bernanke said at a press conference.
Thirty-four percent of economists surveyed by Bloomberg Dec. 6 said the Fed would start tapering its bond-buying program later in the month, up from 17 percent in a Nov. 8 poll.
The Fed’s action came after the unemployment rate fell to a five-year low of 7 percent last month, compared with 7.3 percent in October.
As Bloomberg’s Joshua Zumbrun reported, the Fed’s policy action has the support of current vice chairman Janet Yellen, President Barack Obama’s choice to lead the central bank after Bernanke’s term expires at the end of next month.
The Senate will vote on Yellen’s nomination as soon as today. She’s expected to win confirmation, following her approval by the Senate Banking Committee Nov. 21 on a 14-8 vote.
Bernanke, who said that Yellen, the current vice chair, concurs with the decision on the tapering, also said he has one piece of advice for his successor when it comes to dealing with Congress:
Great question on #Bernanke‘s advice to Yellen on dealing with Congress. “The first thing to agree to is that Congress is our boss,” he says
— Jim Puzzanghera (@JimPuzzanghera) December 18, 2013