Fed Signals It Could Increase Or Decrease Stimulus

Credit: AP
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The Federal Reserve is standing by its extraordinary efforts to stimulate the economy. And it signaled that it could increase or decrease the pace of bond purchases depending on how the job market and inflation perform.

The Fed says after a two-day policy that the job market has shown some improvement in recent months, on balance. But it also notes that unemployment remains high and government budget policies have begun to restrain economic growth

In its statement, the Fed maintained its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent from its current 7.6 percent. And it says it will continue to buy $85 billion a month in bonds to try to keep long-term borrowing costs down.