Wall Street Journal (02/10/14) Jon Hilsenrath
The U.S. Federal Reserve remains on course to curb its monthly bond buying by $10 billion at coming policy meetings. At their meeting late last month, Fed officials reduced the purchases from $75 billion to $65 billion and could introduce a deeper cut to $55 billion at an upcoming session in March. In the past, they have vowed to stick to this plan if the U.S. economy lives up to expectations; but a weakening economy could spur the Fed to keep the program in motion longer than anticipated.
Fed chairwoman Janet Yellen will testify this week on Capitol Hill on the outlook for the economy and the central bank’s monetary policy. It will be her first public appearance since being sworn in. Since late 2012, the Fed has said it would not consider raising interest rates until the U.S. jobless rate declined to 6.5%. That rate has fallen much faster than officials expected over the past year, to 6.6% in January. Federal Reserve officials are now playing down the unemployment rate as a threshold for policy action because they believe it has been lowered in large part by substantial numbers of Americans dropping out of the labor force.