Fed Seen Holding to QE Strategy Even as Payrolls Beat Forecasts The Federal Reserve probably won’t alter its strategy for $85 billion in monthly bond purchases even after a 175,000 gain in U.S. hiring last month exceeded economists’ forecasts. Most economists surveyed before the Labor Department report said they expected the Fed to maintain the pace through the summer and then trim its monthly asset buying to $65 billion starting in September, October or December. Yesterday’s jobs figures probably won’t change their view, said Michael Feroli, a former Fed economist. “If you went into this jobs report thinking they’ll taper in December, you’re probably still thinking December,” said Feroli, chief U.S. economist for JPMorgan Chase & Co. (JPM) in New York. “If you were thinking September, you’re probably still thinking September.” The Federal Open Market Committee has pledged to press on with stimulus until the labor market shows signs of substantial improvement. The commitment prompted investors to closely scrutinize the payroll report for signs the labor market has grown strong enough for Chairman Ben S. Bernanke to begin dialing back stimulus. Debate among policy makers over when to reduce their unprecedented bond buying has shaken financial markets. Yields on 10-year Treasury notes rose to a one-year high of 2.17 percent yesterday in New York from 2.08 percent on June 6 and as low as 1.63 percent last month. The Standard & Poor’s 500 Index rose 1 percent to 1,638.39. bloomberg/news/2013-06-07/bernanke-seen-holding-to-qe-pace-even-as-hiring-beats-forecasts.html
Posted on: Sun, 09 Jun 2013 18:53:45 +0000
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