The U.S. Federal Reserve said Wednesday that it would continue buying bonds at an $85 billion monthly pace for now, expressing concerns that a sharp rise in borrowing costs in recent months could weigh on the economy..The decision surprised financial markets that were braced for a reduction in the central bank’s economic stimulus.
Citing strains in the economy from tight fiscal policy and higher mortgage rates, the Fed decided against a tapering of asset purchases that investors had all but priced into stock and bond markets.
“The tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market,” the U.S. central bank said in a statement explaining its decision.
Fed Sticks to Stimulus, Worried About Growth Soft Spots
September 21, 2013
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