Fed Announces $10B Reduction in Bond Buying

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March 19 (Bloomberg) –- Bloomberg’s Peter Cook reports on the Fed releasing economic projections on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

There is another 10 billion reduction in the bond buying by the federal reserve.

The six point five percent unemployment threshold has been replaced with a more qualitative approach.

The economy slowed in the winter months due to the inclement weather.

Let me get to the forward guidance changes.

Let me redirect you.

Maximum employment and price stability, a highly commodity to state -- stance remains appropriate.

The committee will assess progress, both realized and expected number towards its objectives of maximum employment and two percent inflation.

This will take into account a wide range of information.

Readings on financial development.

The committee continues to anticipate that a likely will be appropriate to maintain the current target range for a considerable time after the asset purchase program ends.

The statement goes on to say, when the committee decides to remove policy accommodation, it will take a balanced approach.

The committee currently anticipates that even after employment and inflation are near mandate consistent levels, economic conditions may or and keeping the target federal funds rate a low levels.

-- below levels.

There is another line, the unemployment rate nearing 6.5%, the committee has updated its forward guidance.

The change does not indicate any change in its policy intentions as set forth in its recent statements.

A detailed explanations of the changes and forward guidance.

The vote was not unanimous.

We had one dissenting vote.

Some of the language weakens the credibility of the committee's commitment to return inflation to the two percent target.

The vote was not unanimous.

The changes in the economy, during the winter months, growth and economic activity slowed during the winter months.

There are some modest changes in here with regards to growth and unemployment from the 16 policymakers around the fed table.

Gdp projected for 2014. 2.8 and three percent, and down slightly.

We also have unemployment for this year, 6.1-6.3%. that is down from where it was in december.

For 2015, growth that three percent.

Just to wrap this up, the fund rates projections, when will the fed began to start to increase rates?

13 of 16 policymakers see the fed doing that first move in 2015. 11 of the 16 fed policymakers surveyed, one percent or lower by the end of 2015. 12 of 16 have the rate at two percent or higher by the end of 2016. the big change, the one everyone are -- everyone expected, the changes and forward guidance, will they satisfy the markets?

We have to wait and see.

Peter, thank you so much.

Let's get to alix steel.

This text has been automatically generated. It may not be 100% accurate.


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