Fed official says stimulus cuts could begin in September
Tuesday, August 06, 2013 2:54 PM
A top official in the Federal Reserve said today that the Fed could begin reducing the size of its bond-buying stimulus program as early as September, Reuters reported, but it could wait longer if economic growth doesn't pick up in the second half of the year.
Atlanta Fed President Dennis Lockhart said continued improvement in the labor market will be the key.
The Fed is currently buying $85 billion per month in mortgage-backed and Treasury securities in order to keep long-term rates down and help with the economic recovery.
If job growth does not pick up, or if the economy sends ambiguous or mixed signals, Lockhart said the asset purchase program may not be changed. His assessment left investors unsure, as the S&P 500 was on track to drop for a second straight day after the comments, Reuters reported.