U.S. Fed Reserve cuts stimulus by $10 billion

U.S.  Fed Reserve cuts stimulus by $10 billion

Advancing with its plans to gradually fully wind down its extraordinary economic stimulus, the U. S. Federal Reserve on Wednesday announced that it would slash its bond purchases by another $10 billion.

The central bank said in a statement that it would purchase bonds worth US$65 billion per month starting February, down from US$75 billion now.

Though some analysts had speculated that the Fed might put its plans to wind down its economic stimulus on hold given the recent turmoil in emerging markets, yet the action was not surprising as Fed Chairman Ben Bernanke in December told reporters that the central bank would likely keep on tapering the bond-purchase program in measured steps through the year until it was completely wound down, as long as the world's biggest economy continued to heal.

Daniel Alpert, managing partner at New York-based Westwood Capital, said, "The Fed's action today represents a continuation of its resolute determination to end (bond purchases) during 2014."

The initial US$10 billion cut in the central bank's monthly bond-purchasing program was announced after its December 17-18 meeting.

Fed Chairman Bernanke managed to adjourn the most recently held policy-setting meeting without any dissents from his colleagues, for the first time since June 2011. It was Bernanke's last policy-setting meeting as he is all set to hand the Federal Reserve's reins over to Vice Chair Janet Yellen on Friday this week.

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