Fed May Just Maintain Purchases, Says Chandler of Brown BrothersJeff Marshall
Federal Reserve Chairman Ben S. Bernanke will probably say tomorrow after a central-bank meeting that policy makers will maintain current bond purchases until improvement in the economy changes their mind, said Marc Chandler of Brown Brothers Harriman & Co.
“Bernanke’s going to be clear, as clear as the Federal Reserve chairman is, that they haven’t decided to do anything except to continue the current policy until the data change their mind,” Chandler, chief currency strategist at Brown Brothers in New York, said during an interview on Bloomberg Radio’s “Surveillance” with Tom Keene and Michael McKee. “And so far the data hasn’t changed their mind.”
The Fed, which opened a two-day policy meeting today, is buying $85 billion of Treasuries each month to put downward pressure on borrowing costs. It has kept its target rate for overnight lending between banks at almost zero since 2008 to support the economy.
Bernanke told U.S. lawmakers May 22 the Fed could begin slowing bond purchases if it sees sustainable improvement in the labor market. While U.S. employers added 175,000 jobs in May, more than economists forecast, the unemployment rate unexpectedly rose to 7.6 percent, the Labor Department reported on June 7.