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Evans says flatly: Fed will keep trimming bond purchases
March 10, 2014 / 5:31 PM / 4 years ago

Evans says flatly: Fed will keep trimming bond purchases

COLUMBUS, Georgia, March 10 (Reuters) - An influential U.S. policymaker said on Monday the Federal Reserve will continue to trim its monthly asset purchases at a $10 billion pace, and gave detail on how the central bank might adjust its so-called forward guidance on interest rates.

“We’re at a point now where we’re ... moving away from purchasing assets, we’re tapering, and our balance sheet continues to be very large but we’re not going to add to it as much,” Chicago Fed President Charles Evans said at Columbus State University.

“The last two meetings we reduced the purchase flow rate by $10 billion and we’re going to continue to do that,” he said bluntly.

Evans added that the Fed will have to adjust its stated plan for keeping rates near zero, saying the new guidance would likely be “qualitative” and describe how the Fed is “looking for the economy to grow, and it will continue to be very low interest rates until we see improvements in the labor market and inflation to get up.”

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