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Economic uptick could add drama to Fed decision

Tuesday, December 17, 2013 - 02:05

A recent drop in U.S. unemployment could impact whether the Federal Reserve will taper its $85 billion a month bond buying, says Reuters correspondent Johnathan Spicer. Ben Bernanke is expected to signal the Fed's next moves in the last press conference of his 7-year tenure as Fed chairman.

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Big question. For tomorrow for the Fed is whether it. Finally decides it's time to cut its quantitative easing program -- the 85 billion dollars in monthly bond purchases treasury bonds and mortgage bonds which are meant to stimulate growth and hiring in the economy. This meeting wasn't supposed to be dramatic maybe -- month ago. But since then job growth has been very good about 2000 jobs month. Retail. Spending has been pretty decent holiday season -- so. Fed officials have a big decision whether it's finally time after fifteen months of buying these bonds at this pace to trim the program a little bit. The other big question for them is whether they'd just -- forward guidance as it's called. They're sort of policy promises when they plan to finally raise interest rates how they finally planned to. Wind down the quantitative easing program they could adjust the language there maybe tinker with some of the forward thresholds they put out. It's those two big questions but to -- when of course for traders everywhere we'll be. Whether it finally tapers quantities. This'll be Bernanke's last press conference is his second the last meeting as chairman of the Federal Reserve after eight years serving there is is going to be a bit of a swan song of course. Maybe will -- Bernanke when he's gone but he he may take the opportunity to. Sort of telegraph a little bit more with little more clarity. A little more specifics when and how the Fed finally plans to reduce its quantitative easing program maybe -- Pelosi is scheduled. Maybe -- Clear top on the amount of bonds as prepared by he could also use the press conference. To talk about the interest rates plan this is sort of a longer term plan to keep rates. Low. Probably and 2015 maybe even 2016 to pay -- what he says. So be all about the message to markets and delicate communication as usual with these fed meetings -- with financial markets that are. On edge.

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Economic uptick could add drama to Fed decision

Tuesday, December 17, 2013 - 02:05