Fed Waits For Signs of Economic Standing
After reports of the slow down of job increases the Fed is now starting to question whether they should cut down on the bond-buying programs that they have been running. Prior to this report the Federal Bank wanted to cut back on their bond-buying program, but the job market is now holding them back. The unemployment rate has dropped to 7.6% but this was not because many jobs were being put into the job market but because the amount of people searching for jobs has decreased. If the economy improves the Fed wants to lower the amount of mortgage backed securities that it is buying.
The economy is still very fragile and volatile so it is good that the Fed is waiting to see how the economy will turn out before they start to cut back on their policies to help improve the economy. Though it is important for the Fed to wait and see how the economy will turn out, not pushing any new policies can also negatively affect the economy because nothing is being done about the current situation.
Written by: Jessica Ho
Source: The Wall Street Journal
Lahart, Justing. (2013). Jobs Report Hits Fed in the Jawbone. The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB10001424127887323916304578404711691889902.html?mod=WSJ_economy_LeftTopHighlights