The U.S. central bank ( the Fed ) starting early next year to gradually decrease their stimulus program, which is regarded as a high – risk policy . The Fed’s rate the U.S. economy is quite ready for this policy.
According to Reuters news agency , the Governor announced that the policy of the Fed , Ben Bernanke, in Washington DC on Wednesday night . With this policy , the Fed will reduce the bulk purchase of government bonds , which has been useful to help the U.S. economy recover from the recession.
In the early stages , the Fed will slowly reduce the monthly bond purchases of U.S. $ 10 billion to U.S. $ 75 billion . The Fed will continue to monitor whether these measures will raise interest rates , which has been kept as low as possible.
More detailed , began in January 2014 , the Fed will cut the purchasing Treasury bonds and mortgage, respectively U.S. $ 5 billion.
Bernanke stated that the reduction in the Fed ‘s stimulus will be running a ” measurable ” next year when the U.S. unemployment rate in stably reduced . The Fed plans to stop completely the end of the 2014 stimulus program.
The move has shocked investors in the financial markets , but not directly cause turmoil on Wall Street and other bourses , because it had previously anticipated maneuvers . For observers , the Fed’s stimulus reduction was deemed necessary to give rise to recovery international confidence in the U.S. economy and the improving employment there.
For the Fed , this is the start of a stimulus reduction historic decision . “The recovery is clearly still far from complete . However , we hope to see the end of the recovery period for the initial phase towards more normal economic growth , ” said Bernanke.
Meanwhile , investors on Wall Street welcomed the positive steps the Fed , which is seen as a good forecast for the U.S. economy . That is why , at the close of the transaction on Wednesday , the major stock indexes rose , even the S & P 500 and the Dow Jones hit a record high.