In a report by Reuters, the Federal Reserve scaled back asset purchases following the slow improvement of the US economy. Such comments suggested that the US central bank had propped up financial and economic markets. The US central bank underscored Fed Chairman's Ben Bernanke's promises that the stimulus will be reduced in response to developments in the economy.
Fed officials this year made votes on monetary policy but claimed they did not know when the stimulus would be withdrawn. Now, Fed officials are on the third round of quantitative easing for the fourteenth month.
The timing was called "necessarily uncertain" by Governor Jerome Powell while Boston Fed President Eric Rosengren claimed it was a reason to be patient.
"What it's reasonable to expect us to do is to be transparent and to move gradually when it is time to withdraw accommodation, or even to begin reducing the pace at which we add accommodation and go slowly in doing that," Powell said in the report by Reuterts during the Asia Economic Policy Conference in San Francisco.
Since Q3 launched, a drop in unemployment was observed. Investors have speculated when Fed officials would take action now that the Fed balance sheet is at a recorded USD3.8 trillion.
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