Fed keeps buying bonds but sees the economic risks easing in US

The Federal Reserve yesterday said risks to the outlook for the US economy and job market had eased since last autumn, but it said it would keep buying $85bn (£54.6bn) in bonds per month given the still-high level of unemployment.

By The Newsroom

Published 20th Jun 2013, 10:14 BST

Describing the economy as expanding moderately, Fed officials cited further improvement in the labour market and the housing sector, even as they noted that inflation was running below their 2 per cent long-term goal.

In a statement after a two-day meeting, the Fed’s policy-setting panel offered a more upbeat assessment of the risks facing the economy than they had after they last met in May.

“The committee sees the downside risks to the outlook for the economy and the labour market as having diminished since the autumn,” the Fed said.

US stocks slipped, the dollar rose to session highs against both the yen and the euro, and US rate futures fell as traders saw the statement as a small step toward an eventual reduction in the central bank’s pace of bond buying.

The Fed repeated it will not lift interest rates until unemployment hits 6.5 per cent or lower.