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              US Central Bank Weighing Continued Economic Support

   Policy makers at the U.S. central bank are deciding whether to start
   trimming their direct support of the American economy.
   The top officials at the Federal Reserve are meeting in Washington
   Wednesday and looking at more favorable trends in the world`s largest
   economy. They plan to announce if they will start to cut the $85
   billion-a-month purchase of securities they have used for more than a
   year to keep interest rates low and boost job growth.
   Economist Mark Vitner at Wells Fargo Bank tells VOA that the "most
   likely course of action" is that the Fed will continue its same direct
   support of the U.S. economy, even as the country`s jobless rate has
   fallen to a five-year low at 7 percent and major stock indexes are near
   record highs.
   "I think they`re going to leave things as is. I think they`re going to
   acknowledge that the economy has gotten better, and which would
   strongly suggest that they`re getting closer to tapering (cutting their
   purchase of securities), and they may reiterate that short-term
   interest rates are going to remain low for a very, very, very long
   time."
   Vitner says "it`s also possible that they do a very small step now,"
   cutting the securities purchases by $5 billion or $10 billion a month,
   and if not now, then in early 2014. The Fed has said it hopes to end
   the purchases by mid-2014 if the economy continues to improve.
   The economist said many of the conditions that Fed policy makers cited
   in September as a reason to not cut the securities purchases have now
   diminished.
   "There`s less political uncertainty. There`s still political
   uncertainty, but there`s much less than there was then. Chances of a
   government shutdown early next year have gone down considerably since
   we got the budget deal. And the economy looks a lot stronger. Most of
   the economic news that we`ve gotten has not only come in stronger than
   expected, but some of it has come in much stronger than expected."
   Fed chairman Ben Bernanke is now in the final weeks of his eight-year
   tenure leading the world`s most powerful central bank, a period that
   included the country`s steepest economic downturn since the Great
   Depression in the 1930s. Fed vice chair Janet Yellen has been nominated
   to replace him in February, and could win Senate confirmation this
   week.
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   onomic-support/1812827.html

References

   1. http://www.voanews.com/content/us-central-bank-weighing-continued-economic-support/1812827.html