According to reports from the Fed two-day policy meeting, the US Federal Reserve are still going to maintain the rate of its bond-buying program at $85 billion a month, however with the positive outlook from the US economy and the employment rate, the Fed hints possible cut down by the end of the year and stop the monthly bond purchases by 2014.
The Federal Reserve kept its interest rate between zero and 0.25%.
The Fed predicts the economy growth the rise as well as the employment rate. Policymakers are expecting inflation to increase to its longer term target of 2%.
The US market declined in the afternoon trading. Dow Jones fell 206 points to close at 15,112, shortly after the statement from the Fed Chairman was released.
The central bank has managed to increase its balance record to approximately $3.3 trillion to bring the borrowing costs down and increase hiring.
“Inflation that is too low is a problem. We expect inflation to come back up. That’s our forecast. But we are concerned about it. We would like to get inflation up to our target. And that will be a factor in our thinking about the thresholds. It will be a factor in our thinking about asset purchases.” Fed Chairman Mr Bernanke told the press conference after the Fed’s two-day meeting.
Federal Reserve board members, financial and bank chairmen present at the meeting did not agree with the suggestion of increasing the interest rates until 2015.
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