The Fed's Bond Purchasing Program: Projections and Why they Matter?

The Fed’s bond purchasing program is meant to hold down long-term loan rates to induce Americans to borrow and spend and invest in the stock market. Any reduction in bond purchases — so-called tapering — would weaken market and spook investors, who have been major beneficiaries of the high bond yield rates. 

In May, Bernanke told a congressional committee the Fed “could” reduce US bond purchases in “the next few meetings” if the outlook for the labor market improves and the Fed is convinced the improvement can be sustained. If that's the case, the Fed will use today's report and press conference to signal the amount by which it would begin decreasing the pace of purchases, currently $40 billion a month in mortgage bonds and $45 billion in longer-term Treasuries. Investors, however, don't think that the Fed will announce a cut in purchases until their October meeting. 


How likely are you to make Mic your go-to news source?

Maxime Fischer-Zernin

Studying Political Science at Duke University (T. '15). His interests lie primarily in American national security and foreign policy. He is currently an Editor-at-Large for the Duke Political Review, and is a contributor for PolicyMic.com.

MORE FROM

CNN's Van Jones allegedly says the Trump Russia stories are "a big nothing burger"

He's the second CNN insider this week to apparently denounce the network's Russia coverage.

Conservative columnist Bret Stephens joins MSNBC

Stephens will remain a columnist at The New York Times.

Department of Homeland Security announces new airline security rules

The new measures could help end the electronics ban.

Democrats on Neil Gorsuch's first Supreme Court term: "We've got another Scalia"

Some say Gorsuch's even-handed performance during his confirmation hearings "might be more an act than it was a real persona."

Fox News just hired US Rep. Jason Chaffetz as a correspondent

Chaffetz is headed to Fox.

Here are the key rulings from the Supreme Court's busy June term

The court's term ended with rulings on immigration, the First Amendment, LGBTQ rights and more.

CNN's Van Jones allegedly says the Trump Russia stories are "a big nothing burger"

He's the second CNN insider this week to apparently denounce the network's Russia coverage.

Conservative columnist Bret Stephens joins MSNBC

Stephens will remain a columnist at The New York Times.

Department of Homeland Security announces new airline security rules

The new measures could help end the electronics ban.

Democrats on Neil Gorsuch's first Supreme Court term: "We've got another Scalia"

Some say Gorsuch's even-handed performance during his confirmation hearings "might be more an act than it was a real persona."

Fox News just hired US Rep. Jason Chaffetz as a correspondent

Chaffetz is headed to Fox.

Here are the key rulings from the Supreme Court's busy June term

The court's term ended with rulings on immigration, the First Amendment, LGBTQ rights and more.